Short-time Work and Unemployment: Long-term effects on labor market outcomes

This study sheds light on the impact of different types of job retention programs such as short-time work (STW).

We analyze the causal effect of an episode of STW on labor market outcomes up to five years later and compare this to the effects of sudden unemployment episodes. Using data from German Socio-Economic Panel (1992–2022), we employ an event-study approach to analyze the effect of unemployment and STW on career trajectories and unpaid care work.

Results show that workers with periods of short-time work have higher employment and wage stability than workers with periods of unemployment. There are no gender differences in the effects of STW on employment and hours worked.

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