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Some Surprising Facts about Working Time Accounts and the Business Cycle

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  • Balleer, Almut

    (RWTH Aachen University)

  • Gehrke, Britta

    (University of Rostock)

  • Merkl, Christian

    (University of Erlangen-Nuremberg)

Abstract

Working time accounts (WTAs) allow firms to smooth hours worked over time. This paper analyzes whether this increase in flexibility has also affected how firms adjust employment in Germany. Using a rich microeconomic dataset, we show that firms with WTAs show a similar separation and hiring behavior in response to revenue changes as firms without WTAs. One possible explanation is that firms without WTAs used short-time work instead to adjust hours worked. However, we find that firms with WTAs use short-time work more than firms without WTAs. These findings call into question the popular hypothesis that WTAs were the key driver of the unusually small increase in German unemployment in the Great Recession.

Suggested Citation

  • Balleer, Almut & Gehrke, Britta & Merkl, Christian, 2015. "Some Surprising Facts about Working Time Accounts and the Business Cycle," IZA Discussion Papers 8890, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp8890
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    References listed on IDEAS

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    1. Cahuc, Pierre & Carcillo, Stéphane, 2011. "Is Short-Time Work a Good Method to Keep Unemployment Down?," IZA Discussion Papers 5430, Institute of Labor Economics (IZA).
    2. Balleer, Almut & Gehrke, Britta & Lechthaler, Wolfgang & Merkl, Christian, 2016. "Does short-time work save jobs? A business cycle analysis," European Economic Review, Elsevier, vol. 84(C), pages 99-122.
    3. Tito Boeri & Herbert Bruecker, 2011. "Short-time work benefits revisited: some lessons from the Great Recession [‘Reversed roles? Wage and employment effects of the current crisis’]," Economic Policy, CEPR;CES;MSH, vol. 26(68), pages 697-765.
    4. Solomon W. Polachek & Konstantinos Tatsiramos (ed.), 2011. "Research in Labor Economics," Research in Labor Economics, Emerald Publishing Ltd, volume 33, number rlec.2011.33, December.
    5. Herwig Immervoll & Andreas Peichl & Konstantinos Tatsiramos (ed.), 2011. "Who Loses in the Downturn? Economic Crisis, Employment and Income Distribution," Research in Labor Economics, Emerald Publishing Ltd, volume 32, number rlec.2011.32, December.
    6. Alexander Herzog-Stein & Ines Zapf, 2014. "Navigating the Great Recession," ILR Review, Cornell University, ILR School, vol. 67(3), pages 891-925, July.
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    Cited by:

    1. Lutz Bellmann & Olaf Hübler, 2015. "Working time accounts and firm performance in Germany," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-18, December.
    2. Ghosh, Sugata & Mitra, Anirban, 2022. "Ethnic identities, public spending and political regimes," Journal of Comparative Economics, Elsevier, vol. 50(1), pages 256-279.
    3. Andrey Launov, 2021. "Working Time Accounts and Turnover," Scandinavian Journal of Economics, Wiley Blackwell, vol. 123(3), pages 1025-1056, July.
    4. Ghosh, Sugata & Mitra, Anirban, 2022. "Ethnic identities, public spending and political regimes," Journal of Comparative Economics, Elsevier, vol. 50(1), pages 256-279.
    5. Bellmann, Lutz & Hübler, Olaf, 2015. "Are Working Time Accounts Beneficial for German Establishments?," IZA Discussion Papers 9583, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    short-time work; working time accounts; business cycles;
    All these keywords.

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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