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Clemens Fuest, President of the Ifo Institute: “We need stronger incentives to switch from part-time to full-time.”

Photo: Frank Hoermann / Sven Simon / IMAGO

Overtime in Germany is hardly worth it for many people, complains the head of the Munich economic research institute Ifo Clemens Fuest. This applies not only to citizens' benefit, but also to lower and middle incomes, because subsidies such as housing benefit or child allowance are affected, said the economic researcher of the "Augsburger Allgemeine".

In the end, only a few euros remain

Fuest gave the example of a family with two children in a city with high rents like Munich. If the family's income jumps from 3,000 to 5,000 euros gross per month due to overtime, not only taxes and social security contributions would be due. In addition, social transfers stopped. »Of the 2000 euros more gross, 32 euros net remain at the end. Everyone understands that working isn’t worth it.”

Fuest called on politicians to examine the various transfer payments and then ensure that a larger share of the income from overtime work can be retained. “It’s not entirely trivial, but it’s doable.”

Part-time work is understandable for individuals, said Fuest. For the economy as a whole, however, this means that fewer goods and services are produced. This affects economic performance and thus tax revenues and social security funds. "We need stronger incentives to switch from part-time to full-time."