The Employment and Windfall Effects of Short-Time Work: Evidence from Germany

Christian Kagerl

No 202414, IAB-Discussion Paper from Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]

Abstract: "I study the ramifications of the German short-time work (STW) scheme using novel administrative data on STW and drawing on evidence from establishment surveys that are linked to the administrative data. I show that, besides financial reasons, firms value and use STW because it allows them to hoard labor in a tight labor market. During the pandemic, I document a strong negative selection into STW based on measures of firm quality and productivity, a pattern not observed during the financial crisis. This selection pattern is explained by the differing types of crises and their impact on establishments. Adjusting for selection, I then investigate the employment effects of STW in the pandemic and find 3-4% higher employment levels for firms utilizing STW. This relationship, however, vanishes quickly after firms exit STW, a result driven by outflows among STW firms being initially lower, but being higher after the end of STW. Partly due to eased access rules, I additionally find that the policy’s windfall effects, or deadweight losses, are large: While back-of-the-envelope calculations suggest that up to half a million jobs were saved by STW in 2020, millions of jobs were supported in total, indicating an insufficient degree of targeting." (Author's abstract, IAB-Doku) ((en))

Keywords: Bundesrepublik Deutschland; Pandemie; IAB-Datensatz BeCovid; IAB-Open-Access-Publikation; Auswirkungen; Beschäftigungseffekte; Beschäftigungsentwicklung; Determinanten; Finanzkrise; IAB-Betriebs-Historik-Panel; IAB-Betriebspanel; Kurzarbeit; Kurzarbeitergeld; Mitnahmeeffekte; Arbeitskräftehortung; Umsatzentwicklung; Unternehmen; Arbeitsplatzsicherheit; Arbeitsproduktivität; 2009-2022 (search for similar items in EconPapers)
JEL-codes: E24 J20 J65 J68 (search for similar items in EconPapers)
Pages: 59 pages
Date: 2024-11-12
New Economics Papers: this item is included in nep-eur, nep-inv and nep-lab
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https://doi.org/10.48720/IAB.DP.2414

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Persistent link: https://EconPapers.repec.org/RePEc:iab:iabdpa:202414

DOI: 10.48720/IAB.DP.2414

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