Short-Time Work: The German Answer to the Great Recession

30 Pages Posted: 25 Jun 2011

See all articles by Karl Brenke

Karl Brenke

German Institute for Economic Research (DIW Berlin) - Public Economics

Ulf Rinne

IZA Institute of Labor Economics

Klaus F. Zimmermann

Global Labor Organization (GLO); UNU-MERIT; Maastricht University, Department of Economics; Free University Berlin; University of Bonn; Centre for Economic Policy Research (CEPR); Journal of Population Economics

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Date Written: June 2011

Abstract

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 shorttime work are still in place. This leads to undesired side effects.

Keywords: economic crisis, labour market policy, partially unemployed workers, short-time work compensation

JEL Classification: J65, J68

Suggested Citation

Brenke, Karl and Rinne, Ulf and Zimmermann, Klaus F., Short-Time Work: The German Answer to the Great Recession (June 2011). CEPR Discussion Paper No. DP8449, Available at SSRN: https://ssrn.com/abstract=1871560

Karl Brenke (Contact Author)

German Institute for Economic Research (DIW Berlin) - Public Economics ( email )

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Berlin, 10117
Germany

Ulf Rinne

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.iza.org/profile?key=1844

Klaus F. Zimmermann

Global Labor Organization (GLO) ( email )

Bonn
Germany

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UNU-MERIT ( email )

Keizer Karelplein 19
Maastricht, 6211TC
Netherlands

Maastricht University, Department of Economics ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands

University of Bonn

Postfach 2220
Bonn, D-53012
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Journal of Population Economics

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D-69121 Heidelberg
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