Arbeitspapier

Short-Time Work and Precautionary Savings

In the Covid-19 crisis, most OECD countries have used short-time work (subsidized working time reductions) to preserve employment relationships. This paper studies whether short-time work can save jobs through stabilizing aggregate demand in recessions. First, we show that the consumption risk of short-time work is considerably smaller compared to unemployment using household survey data from Germany. Second, we build a New Keynesian model with incomplete asset markets and labor market frictions featuring an endogenous firing and short-time work decision. In recessions, short-time work reduces the unemployment risk of workers, which mitigates their precautionary savings motive. Using a quantitative model analysis, we show that this channel increases the stabilization potential of short-time work over the business cycle.

Sprache
Englisch

Erschienen in
Series: CESifo Working Paper ; No. 9873

Klassifikation
Wirtschaft
Macroeconomics: Consumption; Saving; Wealth
Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
Business Fluctuations; Cycles
Monetary Policy
Fiscal Policy
Labor Turnover; Vacancies; Layoffs
Thema
short-time work
fiscal policy
incomplete asset markets
unemployment risk
matching frictions

Ereignis
Geistige Schöpfung
(wer)
Dengler, Thomas
Gehrke, Britta
Ereignis
Veröffentlichung
(wer)
Center for Economic Studies and ifo Institute (CESifo)
(wo)
Munich
(wann)
2022

Handle
Letzte Aktualisierung
20.09.2024, 08:20 MESZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Dengler, Thomas
  • Gehrke, Britta
  • Center for Economic Studies and ifo Institute (CESifo)

Entstanden

  • 2022

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