Does Short-Time Work Save Jobs? A Business Cycle Analysis

Konferenzbeitrag

This paper analyzes the effects of short-time work (i.e., government subsidized working time reductions) on unemployment and output fluctuations. The central question is whether short-time work saves jobs in recessions. In our baseline scenario the rule based component of short-time work (i.e., due to the existence of the institution) stabilizes unemployment fluctuations by 15% and output fluctuations by 7%. Given the small share of short-time work expenses in terms of GDP, the stabilization effects are large compared to other instruments such as the income tax system. By contrast, discretionary short-time work interventions (i.e., rule changes) do not have any statistically significant effect on unemployment. These effects are based on a SVAR estimation,which uses an elasticity of the German establishment panel for identification purposes. The model shows that non-effects of discretionary interventions (i.e., 100% deadweight) may be due to their low persistence.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2013: Wettbewerbspolitik und Regulierung in einer globalen Wirtschaftsordnung - Session: Labor Market Dynamics ; No. B17-V2

Classification and Topics

• Classification: Wirtschaft ; Business Fluctuations; Cycles ; Institutions and the Macroeconomy ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Merkl, Christian ; Balleer, Almut ; Gehrke, Britta ; Lechthaler, Wolfgang
• Event: Veröffentlichung
• (who): ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
• (where): Kiel und Hamburg
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/79718
• Last update: 10.03.2025, 11:43 AM CET