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

Arbeitspapier

In the Great Recession most OECD countries used short-time work (publicly subsidized working time reductions) to counteract a steep increase in unemployment. We show that short-time work can actually save jobs. However, there is an important distinction to be made: While the rule-based component of short-time work is a cost-efficient job saver, the discretionary component appears to be completely ineffective. In a case study for Germany, we use the rich data available to combine micro- and macroeconomic evidence with macroeconomic modeling in order to identify, quantify and interpret these two components of short-time work.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 7475

Classification and Topics

• Classification: Wirtschaft ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Business Fluctuations; Cycles ; Fiscal Policy ; Labor Economics Policies ; Labor Turnover; Vacancies; Layoffs
• Subject: short-time work ; fiscal policy ; business cycles ; search-and-matching ; SVAR

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Balleer, Almut ; Gehrke, Britta ; Lechthaler, Wolfgang ; Merkl, Christian
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/80599
• Last update: 10.03.2025, 11:42 AM CET