A study has revealed that the so-called Hartz reform mapped out in 2003 and 2004 under former Chancellor Gerhard Schroeder failed to create more jobs in Germany, a leading German business newspaper reported on Wednesday.

The reform, which had been named after Peter Hartz, a director at automaker Volkswagen, failed to help reduce the double-digit unemployment rate. Indeed, in some cases it aggravated the problem, according to the government-commissioned study, quoted by business daily Handelsblatt.

The study, a several-thousand-page report, found that many of the reforms were costly, ineffective and fell wide of the mark in tackling the structural problems in the German labor market.

In February 2002, the Hartz Commission was founded under the leadership of Hartz, who was then VW's personnel director.

The initiative became part of the German government's Agenda 2010 series of reforms, known as Hartz I - Hartz IV. The reforms of Hartz I - III took place between January 1, 2003 and 2004; Hartz IV began on January 1, 2005.

The study, by several leading economic thinktanks ordered by the federal government, was particularly critical of the introduction of "personal service agencies" by the Hartz reform.

The so-called PSAs were set up to "hire" the jobless and "lend" them to companies in the hope they would eventually gain jobs.

In fact, the measure lengthened the time a person was unemployed by an average of one month and created additional costs of 5,700 euros (6,800 US dollars) per person. The labor costs were not reduced.

The report also found that efforts to make the hiring of older workers more attractive were entirely ineffective.

It pointed out that a "mini job" program to create low-wage, part-time positions did little to pave the way toward full employment.

The report also shows that training programs, government salary subsidy programs and state job creation measures also proved a disappointment in driving down unemployment, which is consistently listed by Germans as the number-one national problem.

The high unemployment rate, which currently stands at around 11 percent, is regarded as one of the key problems facing Germany's economy, and one of the key factors that led to a weak domestic demand and stagnated its economic growth.

Source: Xinhua