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The role of short-time work and discretionary policy measures in mitigating the effects of the COVID-19 crisis in Germany

Michael Christl (), Silvia De Poli, Tine Hufkens, Andreas Peichl () and Mattia Ricci ()
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Mattia Ricci: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en

No 2021-04, JRC Working Papers on Taxation & Structural Reforms from Joint Research Centre (Seville site)

Abstract: In this paper, we investigate the impact of the COVID-19 pandemic on German household income using a micro-level approach. We combine a microsimulation model with labour market transition techniques to simulate the COVID-19 shock on the German labour market. We find the consequences of the labour market shock to be highly regressive with a strong impact on the poorest households. However, this effect is nearly entirely offset by automatic stabilisers and discretionary policy measures. We explore the cushioning effect of these policies in detail, showing that short-time working schemes and especially the one-off payments for children are effective in cushioning the income loss of the poor.

Keywords: COVID-19; EUROMOD; microsimulation; short-time work; automatic stabilisers (search for similar items in EconPapers)
JEL-codes: D31 E24 H24 (search for similar items in EconPapers)
Date: 2021-07
New Economics Papers: this item is included in nep-eur, nep-lma and nep-mac
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Working Paper: The Role of Short-Time Work and Discretionary Policy Measures in Mitigating the Effects of the Covid-19 Crisis in Germany (2021) Downloads
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