The Employment and Output Effects of Short-Time Work in Germany

Russell Cooper

No 613, 2017 Meeting Papers from Society for Economic Dynamics

Abstract: We study the employment and output effects of the short-time work (STW) policy in Ger- many between 2009 and 2010. This intervention facilitated reductions in hours worked per employee with the goal of preventing layoffs. Using confidential German micro-level data we estimate a search model with heterogeneous multi-worker firms. Our findings suggest that STW can prevent increases in unemployment during a recession. However, the policy leads to a decrease in the allocative efficiency of the labor market, resulting in significant output losses.

Date: 2017
New Economics Papers: this item is included in nep-dge, nep-eur and nep-mac
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Citations: View citations in EconPapers (63)

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Working Paper: The Employment and Output Effects of Short-Time Work in Germany (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed017:613

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