Laws enacted in 1883, 1884 and 1889 established three kinds of compulsory insurance for workers which have remained the nucleus of the German social security system to this very day: health, accident, and invalidity and old-age insurance. In 1911 these schemes were merged in the Reich Insurance System, which added pensions for widows and orphans. Invalidity and old-age insurance was extended to all salaried employees. A separate insurance system was introduced for miners in 1923. Unemployment insurance was established in 1927, and as from 1938 craftsmen, to the extent that they were not privately insured, were covered by the statutory social insurance scheme as well.

After the Second World War, the system was greatly extended and improved. In 1957, for instance, a statutory old-age insurance scheme for farmers was introduced, and in that same year pensions in general were indexed, i.e. adjusted in line with the average increase in incomes. Further reforms were introduced in 1972 and 1992.