Pursue Transformation Instead of Extending Short-Time Work. IAB statement on the Proposal of the Federal Ministry of Labor and Social Affairs dated 5 December 2025

Abstract

"The German government plans to maintain the current maximum potential benefit duration for short-time work at 24 months until the end of 2026. This maximum duration was extended in December 2024 from 12 to 24 months, with the extension initially limited to the end of 2025. In this statement, submitted as part of the consultation process of the Federal Ministry of Labor and Social Affairs, the IAB explains why it takes a critical view of this renewed extension. The current weakness of the German economy represents a structural crisis, in which an expansion of short-time work may delay necessary transformation processes. Moreover, an evaluation of a past benefit duration extension does not show any positive employment effects. Rather than relying on more short-time work, long-term initiatives to support the transformation of the economy and the skills of workers are better suited to improving Germany’s productivity and competitiveness. The present statement builds on IAB Statement 7/2024 on the original extension of the benefit duration, which has been updated, adapted and expanded for the current context." (Author's abstract, IAB-Doku) ((en))

Cite article

Fitzenberger, B., Kagerl, C. & Wolter, S. (2026): Transformation angehen statt Kurzarbeit verlängern. Stellungnahme des IAB zur Verbändebeteiligung des Bundesministeriums für Arbeit und Soziales zum 5.12.2025. (IAB-Stellungnahme 03/2026), Nürnberg, 13 p. DOI:10.48720/IAB.SN.2603