History

With the Job Placement and Unemployment Insurance Act of 16 July 1927, health, accident and pension insurance were joined by another pillar of the social welfare state . This newly inaugurated insurance protected against the risk of unemployment in accordance with the solidarity principle of quid pro quo. The authority in charge of unemployment insurance, self-governed on the basis of parity, was also set the tasks of job placement and counselling, as well as traineeship placement.

At the time the world economic crisis struck in the late twenties, the unemployment insurance had not yet been able to build up any financial reserves and was not able to cope with the enormous financial burden placed on it by spiralling mass unemployment. By 1932 over six million people were out of work in Germany, almost one third of all workers.

When the National Socialists seized power in 1933, the Imperial Institute for Job Placement and Unemployment Insurance was brought into line with the political motives of the new administration. Self-government and free choice of occupation were abolished and "workforce deployment" came under state supervision. Following the invasion of Poland, the Employment Offices were responsible for the occupied territories as well, their main task being the exploitation of all available labour reserves for the German war industry.

The Act to Set Up a Federal Office for Job Placement and Unemployment Insurance enacted on 10 March 1952 established a federal authority with headquarters in Nuremberg. Unemployment insurance was once again based on equal participation in self-government by the contribution-paying social partners and representatives of the public funds. In 1969 the Employment Promotion Act was passed, giving the institute in charge of unemployment insurance the name: "Bundesanstalt für Arbeit" - Federal Employment Office (which is yet called Federal Employment Agency - Bundesagentur für Arbeit).