Conditions of Work and Employment Series No. 25
The German work-sharing scheme: An instrument for the crisis
This working paper takes an in-depth look at Germany’s Kurzarbeit scheme, and how it has been used as an instrument to combat the economic and jobs crisis. It begins by reviewing the international context, comparing the economic and jobs situation in Germany with the European Union (EU) and the United States and demonstrating that, despite a much stronger decline in German GDP, unemployment in Germany has increased very modestly compared to the United States or the EU as a whole. The paper then reviews what work sharing is; the perspectives of both employers and employees; its use as a labour market policy tool; and how it ―works‖ in Germany. The paper then follows developments in the use of work sharing during the crisis —first expanding in a dramatic fashion with the sharp drop in demand early in the crisis, reaching a peak in mid-2009, and then declining towards the end of that year. It analyses the types of establishments which have used work sharing and for how long; the costs of work sharing; and the extent to which work-sharing participants have participated in further training. The paper concludes with preliminary estimates of the effects of Kurzarbeit on employment in Germany during the present crisis, as well as the prospects for the future.