Discussion paper

DP8449 Short-Time Work: The German Answer to the Great Recession

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.

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Citation

Zimmermann, K, and K Brenke (2011), ‘DP8449 Short-Time Work: The German Answer to the Great Recession‘, CEPR Discussion Paper No. 8449. CEPR Press, Paris & London. https://cepr.org/publications/dp8449