A new GLO Discussion Paper shows that short-time work accounts for almost all of the working-time reduction in Germany during the pandemic.
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GLO Discussion Paper No. 840, 2021
Germany’s Labour Market in Coronavirus Distress – New Challenges to Safeguarding Employment – Download PDF
by Herzog-Stein, Alexander & Nüß, Patrick & Peede, Lennert & Stein, Ulrike
GLO Affiliate Patrick Nüß
Author Abstract: We analyse measures of internal flexibility taken to safeguard employment during the Coronavirus Crisis in comparison to the Great Recession. Cyclical working-time reductions are again a major factor in safeguarding employment. Whereas during the Great Recession all working-time instruments contributed to the reduction in working time, short-time work (STW) now accounts for almost all of the working-time reduction. STW was more rapidly extended, more generous, and for the first time a stronger focus was put on securing household income on a broad basis. Still, the current crisis is more severe and affects additional sectors of the economy where low-wage earners are affected more frequently by STW and suffered on average relatively greater earnings losses. A hypothetical average short-time worker had a relative income loss in April 2020 that was more than twice as large as that in May 2009. Furthermore, marginal employment is affected strongly but not protected by STW.
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