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

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Listed:
  • Brenke, Karl

    (DIW Berlin)

  • Rinne, Ulf

    (IZA)

  • Zimmermann, Klaus F.

    (University of Bonn)

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 short-time work are still in place. This leads to undesired side effects.

Suggested Citation

  • Brenke, Karl & Rinne, Ulf & Zimmermann, Klaus F., 2011. "Short-Time Work: The German Answer to the Great Recession," IZA Discussion Papers 5780, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp5780
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    More about this item

    Keywords

    short-time work compensation; labor market policy; economic crisis; partially unemployed workers;
    All these keywords.

    JEL classification:

    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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