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Does short-time work save jobs? A business cycle analysis

Listed author(s):
  • Balleer, Almut
  • Gehrke, Britta
  • Lechthaler, Wolfgang
  • Merkl, Christian

In the Great Recession most OECD countries used short-time work (publicly subsidized working time reductions) to counteract a steep increase in unemployment. We show that short-time work can actually save jobs. However, there is an important distinction to be made: while the rule-based component of short-time work is a cost-efficient job saver, the discretionary component is completely ineffective. In a case study for Germany, we use the rich data available to combine micro- and macroeconomic evidence with macroeconomic modeling in order to identify, quantify and interpret these two components of short-time work.

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Article provided by Elsevier in its journal European Economic Review.

Volume (Year): 84 (2016)
Issue (Month): C ()
Pages: 99-122

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Handle: RePEc:eee:eecrev:v:84:y:2016:i:c:p:99-122
DOI: 10.1016/j.euroecorev.2015.05.007
Contact details of provider: Web page: http://www.elsevier.com/locate/eer

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