The Employment and Productivity Effects of Short-Time Work in Germany

52 Pages Posted: 8 Sep 2016

See all articles by Russell Cooper

Russell Cooper

University of Texas at Austin - Department of Economics; National Bureau of Economic Research (NBER)

Moritz Meyer

The World Bank

Immo Schott

European University Institute

Date Written: September 6, 2016

Abstract

We study the employment and productivity effects of short-time work (STW) in Germany between 2009 and 2010. The policy facilitated reductions in hours worked per employee with the goal of preventing layoffs. Using confidential German micro-level data we estimate a search model with heterogeneous multi-worker firms. Our findings suggest that STW was successful in preventing an increase in unemployment. However, the policy has led to a decrease in the allocative efficiency of the German labor market resulting in significant output losses and a large fiscal burden for the government.

Suggested Citation

Cooper, Russell W. and Meyer, Moritz and Schott, Immo, The Employment and Productivity Effects of Short-Time Work in Germany (September 6, 2016). Available at SSRN: https://ssrn.com/abstract=2835722 or http://dx.doi.org/10.2139/ssrn.2835722

Russell W. Cooper

University of Texas at Austin - Department of Economics ( email )

Austin, TX 78712
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Moritz Meyer (Contact Author)

The World Bank ( email )

1818 H Street
Washington, DC 20433
United States

Immo Schott

European University Institute

Register to save articles to
your library

Register

Paper statistics

Downloads
119
Abstract Views
514
rank
234,531
PlumX Metrics