>This paper gives a detailed introduction and analysis of the context and content of German labor market reforms，especially the well-known “Hartz reforms”.An evaluation of the reforms is made from the perspective of the trade-off between efficiency and insurance. Based on the evaluation，the impact of introducing negative income tax is then explored. Conclusion：it is crucial to design a scheme so that it copes with the tradeoff between incentives and insurance in such a way that it will gain political support. The Hartz reforms can be seen just as a small first step in that direction.