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

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 04.06.2013, 12:15 - 13:30

   

Presentation by 

Christian Merkl (University of Erlangen-Nuremberg)
   

Abstract:

In the Great Recession most OECD countries used short-time work (publicly subsidized working time reduction) to counteract a steep increase of unemployment. We show that short-time work can actually save jobs. However, there is an important distinction to be made: While the automatic stabilization 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 macro-evidence with macroeconomicmodeling in order to identify, quantify and interpret these two components of short-time work.

   
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