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Capitalists Against Crisis: Employers and Short Time Work in Germany and Italy, 2008-2010


  • Federico Pancaldi


Why did employers pro-actively support the temporary expansion of short time work (STW) schemes during the recent crisis? This paper conceptualizes the role of STW in this contingency as an instrument of subsidized job protection that enabled employers to hoard skilled labor, reduce non-wage labor costs on fallen work hours, and preserve social rest with unions. Two sources of variation are analyzed, at cross-national and cross-sectoral level. By comparing Germany and Italy, the paper finds that employers support for STW was especially strong in skill-intensive manufacturing sectors in both countries, in line with theoretical expectations. However, cross-national diversity in the design and institutional function of STW within their respective labor market regimes shaped different incentive structures for employers in small firms and low-skill services. More generous subsidization of STW through public resources explains the stronger favor of this group in Italy than in Germany.

Suggested Citation

  • Federico Pancaldi, 2011. "Capitalists Against Crisis: Employers and Short Time Work in Germany and Italy, 2008-2010," Carlo Alberto Notebooks 222, Collegio Carlo Alberto.
  • Handle: RePEc:cca:wpaper:222

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    employers; short time work; employment protection; financial crisis; crosssectoral approach;

    JEL classification:

    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
    • 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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