The project will conduct a comprehensive and systematic evaluation of reforms of the Arbeitslosengeld II and other transfer payments, with the aim of improving work incentives in the low wage sector. The key outcome variables of the evaluation are the labour supply and distribution effects of the reforms, their effects on the number of transfer recipients and on the level of the transfer payments, and the fiscal effects of the reforms.The reforms that will be evaluated fall into two broad categories. On the one hand, the project will evaluate three concrete reform proposals (Sachverständigenrat 2006, Bofinger et al. 2006, Boss, Christensen and Schrader 2010) within a common model framework. The second category involves the evaluation of a systematic variation of key parameters of the Arbeitslosengeld II.