The principal aim of the project is to submit a proposal concerning the reform of the German unemployment insurance, unemployment assistance and social assistance system. The project is part of a major project whose aim is to provide a reform proposal concerning the complete German social security system additionally containing the public pension system and health insurance. Project work is essentially based on the following steps: In a first step, it is intended to analyse the status-quo systems and to identify current reform requirements. In a second step, reform concepts are developed, which are to be evaluated with respect to their public budget implications and with respect to their impact on efficiency and income distribution. Concerning the quantitative analysis, micro simulations and a computable general equilibrium model are used to simulate the implications of potential reform concepts. As regards the cooperation with the other project partners, the principal aim is to take into account repercussions and to quantify budgetary interdependencies among the separate pillars of the German social security system.