Demarkations and forecasts of sectors of industry : thoughts on structural short-time work allowances pursuant to § 63 Sec. 4 AFG (Employment Promotion Act)

Abstract

"According to § 63 Sec. 4 AFG, short-time work allowances can be granted under less restrictive conditions, if loss of work occurs in sectors of industry suffering from grave structural deterioration. This article addresses the question of whether or not enough precise criteria exist from an economic standpoint to understand what a branch of industry is and how to measure grave structural deterioration. The answer is that structural research cannot provide these criteria, because the problem areas in structural change rarely coincide with the statistical demarkations of the sectors of industry and the potential for disaggregated sector forecasts is limited. Starting with the diverse demarkation criteria applied to sectors of industry in the various systematics used by the official statistics, it is shown that no definition of a sector of industry valid once and for all exists and this is also not possible. For instance, 15% to 20% of the production of institutionally demarkated sectors of industry can be attributed to areas outside the sectors at the level of a four-digit level SYPRO; these percentages may even be considerably larger in individual companies. Finally, it is always companies and not sectors of industry which can be caught up in adjustment pressures. Looking back at the economic development of sectors in the past decade shows that at the beginning of the 80s many industries appeared to be subsiding sectors, which, however, in the following years in fact gained a considerable share of the employment market, whereas other sectors ended up in unpredicatable difficulties. Even seemingly clear and plausible forecasts - for example, that energy price jumps would activate a structural change at the expense of energy intensive industries - often proved to be wrong in retrospect. The actual task of structural research is to identify the determinants of structural change and disclose weak areas, rather than to make forecasts. The article repeats a predominantly unchanged expert opinion written in 1993. The recommendation was made then that the term of short-time work regulation pursuant to § 63 Sec, 4 AFG should not be extended beyond the then legally set date of 31st December 1995. Since this date has been extended to the end of 1997 by an amending statute to the AFG, the authors can only once again strongly recommend that structural short-time work allowances be terminated at the lastest by this date." (Author's abstract, IAB-Doku) ((en))

Cite article

Klodt, H. & Schmidt, K. (1995): Branchenabgrenzungen und Branchenprognosen. Überlegungen zum Struktur-Kurzarbeitergeld nach § 63 Abs. 4 AFG. In: Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Vol. 28, No. 4, p. 544-561.