Short-time work: When is it worthwhile, and for how long?

Abstract

"Thanks to short-time work, companies and establishments can lower their personnel costs with the help of state benefit payments when work levels are temporarily reduced, be it for economic or seasonal reasons, and - in the best case - avoid redundancies. Short-time work removes the burden of paying wages and salaries from businesses during downtime and thus bolsters their willingness to retain their regular workforce despite declining demand. In contrast to a personnel policy of 'hiring and firing' - experts speak here of 'external flexibility' - short-time work strengthens the internal flexibility of the individual establishment. For the employees concerned, short-time work is in any case better than being made redundant, both from the perspective of income and psychologically. When viewed from the aspect of economic policy, short-time work is also advantageous because it functions as a built-in stabiliser during the crisis. However these positive sides are offset by the costs of short-time work, which have to be borne by the individual establishments and their employees as well as those paying social security contributions and taxes. This article discusses the various options for action available to establishments during temporary downtime and analyses the effect this has on those concerned." (Authors' abstract, IAB-Doku) ((en))

Cite article

Crimmann, A., Möller, J., Stops, M. & Walwei, U. (2009): Kurzarbeit: Wann und wie lange lohnt sie sich? In: IAB-Forum No. 2, p. 104-111. DOI:10.3278/IFO0902W104