DP8449 Short-Time Work: The German Answer to the Great Recession
|Author(s):||Karl Brenke, Ulf Rinne, Klaus F Zimmermann|
|Publication Date:||June 2011|
|Keyword(s):||economic crisis, labour market policy, partially unemployed workers, short-time work compensation|
|Programme Areas:||Labour Economics|
|Link to this Page:||www.cepr.org/active/publications/discussion_papers/dp.php?dpno=8449|
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.