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Working time accounts and unemployment

Author

Listed:
  • Launov, Andrey
  • Wälde, Klaus

Abstract

Working time accounts allow rms to smooth their demand for hours employed. Descriptive literature suggests that this reduces turnover and inhibits increase in unemployment during recessions. We model theoretically the optimal choice of hours by a rm with a working time account. We show that working time accounts do not necessarily imply lower turnover. Turnover and unemployment may be inhibited or catalyzed by working time account depending on whether a rm meets economic downturn with surplus or de cit of hours and on how productive this rm is. Adjustment pattern in Germany implies that working time accounts have contributed positively.

Suggested Citation

  • Launov, Andrey & Wälde, Klaus, 2015. "Working time accounts and unemployment," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113108, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc15:113108
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    References listed on IDEAS

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    1. Samuel Bentolila & Giuseppe Bertola, 1990. "Firing Costs and Labour Demand: How Bad is Eurosclerosis?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(3), pages 381-402.
    2. Alexander Herzog-Stein & Ines Zapf, 2014. "Navigating the Great Recession," ILR Review, Cornell University, ILR School, vol. 67(3), pages 891-925, July.
    3. Rebekka Christopoulou & Philip Vermeulen, 2012. "Markups in the Euro area and the US over the period 1981–2004: a comparison of 50 sectors," Empirical Economics, Springer, vol. 42(1), pages 53-77, February.
    4. Michael C. Burda & Jennifer Hunt, 2011. "What Explains the German Labor Market Miracle in the Great Recession," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 42(1 (Spring), pages 273-335.
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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.

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    More about this item

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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