lohngestützte

Lohngestützte is a German term used to describe policy instruments and programs that subsidize wages to promote employment and labor market participation. As a category, it covers measures where a portion of an employee’s wage is paid or offset by public funds, with the aim of reducing labor costs for employers and encouraging hiring, especially for groups facing barriers to work.

Typical features of lohngestützte measures include the subsidy being tied to the employment relationship for a limited period, the subsidy amount or duration defined by program rules, and eligibility criteria related to target groups such as long-term unemployed, young jobseekers, people with disabilities, or residents in high-unemployment regions. Funding is usually provided by government agencies or social security systems and administered through employers who submit claims for reimbursement or subsidies.

Rationale for use centers on raising job creation, improving duration of employment, and easing transitions into the regular labor market. The effectiveness of lohngestützte programs varies with design, targeting, and economy-wide conditions; well-designed schemes can enhance job retention and skill development, while poorly designed ones may merely subsidize existing hiring or lead to distortions.

Critics point to potential drawbacks such as crowding out unsubsidized positions, dependency on subsidies, and administrative complexity. In practice, lohngestützte measures are often part of broader labor market policies, sometimes complemented by training, wage-tax incentives, or employment services to improve outcomes. The term is widely used in German-speaking policy discussions and differs in specifics across countries.