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Germany's Labour Market in Coronavirus Distress - New Challenges to Safeguarding Employment

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  • Herzog-Stein, Alexander
  • Nüß, Patrick
  • Peede, Lennert
  • Stein, Ulrike

Abstract

We analyse measures of internal flexibility taken to safeguard employment during the Coronavirus Crisis in comparison to the Great Recession. Cyclical working-time reductions are again a major factor in safeguarding employment. Whereas during the Great Recession all working-time instruments contributed to the reduction in working time, short-time work (STW) now accounts for almost all of the working-time reduction. STW was more rapidly extended, more generous, and for the first time a stronger focus was put on securing household income on a broad basis. Still, the current crisis is more severe and affects additional sectors of the economy where low-wage earners are affected more frequently by STW and suffered on average relatively greater earnings losses. A hypothetical average short-time worker had a relative income loss in April 2020 that was more than twice as large as that in May 2009. Furthermore, marginal employment is affected strongly but not protected by STW.

Suggested Citation

  • Herzog-Stein, Alexander & Nüß, Patrick & Peede, Lennert & Stein, Ulrike, 2021. "Germany's Labour Market in Coronavirus Distress - New Challenges to Safeguarding Employment," GLO Discussion Paper Series 840, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:840
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    1. Toralf Pusch & Hartmut Seifert, 2021. "Kombination von Kurzarbeit und Qualifizierung — ein gutes Konzept mit mäßigem Erfolg [Combination of short-time work and qualification — a good concept with moderate success]," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 101(8), pages 660-662, August.
    2. Herzog-Stein, Alexander & Nüß, Patrick & Peede, Lennert & Stein, Ulrike, 2022. "Germany and the United States in coronavirus distress: internal versus external labour market flexibility," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 56, pages 1-11.
    3. Daniel Fackler & Claus Schnabel & Jens Stegmaier, 2024. "Personnel adjustments during the Covid-19 pandemic: did co-determination make a difference?," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 58(1), pages 1-10, December.
    4. Peltonen, Juho, 2023. "Short-time work in search and matching models: Evidence from Germany during the Covid-19 crisis," MPRA Paper 119238, University Library of Munich, Germany.
    5. Peltonen, Juho, 2023. "On the efficiency of labor markets with short-time work policies," MPRA Paper 119165, University Library of Munich, Germany.
    6. Ben Yahmed, Sarra & Berlingieri, Francesco & Brüll, Eduard, 2022. "Adjustments of local labour markets to the COVID-19 crisis: The role of digitalisation and working-from-home," ZEW Discussion Papers 22-031, ZEW - Leibniz Centre for European Economic Research.

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    More about this item

    Keywords

    Internal Flexibility Short-Time Work; Business Cycles; Great Recession; Coronavirus Crisis;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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