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

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  • Federico Pancaldi
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    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.

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    Paper provided by Collegio Carlo Alberto in its series Carlo Alberto Notebooks with number 222.

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    Length: 34 pages
    Date of creation: 2011
    Handle: RePEc:cca:wpaper:222
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