Does short-time work save jobs? A business cycle analysis

Almut Balleer, Britta Gehrke, Wolfgang Lechthaler and Christian Merkl

European Economic Review, 2016, vol. 84, issue C, 99-122

Abstract: 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 is 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.

Keywords: Short-time work; Fiscal policy; Business cycles; Search and matching; SVAR (search for similar items in EconPapers)
JEL-codes: E24 E32 E62 J08 J63 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (133)

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Related works:
Working Paper: Does Short-Time Work Save Jobs? A Business Cycle Analysis (2014)
Working Paper: Does Short-Time Work Save Jobs? A Business Cycle Analysis (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:84:y:2016:i:c:p:99-122

DOI: 10.1016/j.euroecorev.2015.05.007

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