29 Pages Posted: 20 Jun 2011
Short-time work was the "German answer" to the economic crisis. The number of short-time workers strongly increased in the recession and peaked at more than 1.5 million. Without the extensive use of short-time work, unemployment would have risen by approximately twice as much as it actually did. Short-time work has certainly contributed to the mild response of the German labor market to the crisis, but this is likely due to the country-specific context. Although the crisis has been overcome and employment is strongly expanding, modified regulations governing short-time work are still in place. This leads to undesired side effects.
Keywords: labor market policy, partially unemployed workers, short-time work compensation, economic crisis
JEL Classification: J65, J68
Suggested Citation: Suggested Citation
Brenke, Karl and Rinne, Ulf and Zimmermann, Klaus F., Short-Time Work: The German Answer to the Great Recession. IZA Discussion Paper No. 5780. Available at SSRN: https://ssrn.com/abstract=1867049