Basic income support (BIS) recipients in Germany: Unemployment dynamics during the COVID-19 pandemic

Abstract

Abstract The COVID-19 pandemic constitutes a challenge for social security systems such as the German basic income support (BIS) system of ‘Unemployment Benefit II'. The article analyses BIS entries and exits of unemployed people, differentiating by individual characteristics and economic sectors as well as BIS recipients’ participation in active labour market programmes during the first phase of the coronavirus crisis. Using aggregate administrative data, we find that lower exit rates from unemployment drive the coronavirus-related change in unemployment levels for BIS recipients more strongly than for the average unemployed. Those most strongly affected in their employment opportunities are BIS recipients without a vocational degree, thus underlining the importance of education. Furthermore, the sectors accommodation and food service activities and temporary agency employment, which normally provide employment opportunities for BIS recipients, are most affected by the Covid-19 crisis.