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

Almut Balleer, Britta Gehrke, Wolfgang Lechthaler and Christian Merkl

No 7475, IZA Discussion Papers from Institute of Labor Economics (IZA)

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 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.

Keywords: business cycles; fiscal policy; short-time work; search-and-matching; SVAR (search for similar items in EconPapers)
JEL-codes: E24 E32 E62 J08 J63 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2013-06
New Economics Papers: this item is included in nep-lab and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (71)

Published - published in: European Economic Review, 2016, 84, 99–122

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Related works:
Journal Article: Does short-time work save jobs? A business cycle analysis (2016)
Working Paper: Does Short-Time Work Save Jobs? A Business Cycle Analysis (2014)
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