Was Short-Time Work a Miracle Cure During the Great Recession? The Case of Germany and Italy

Abstract

This paper considers the use of short-time work schemes as a device to mitigate the negative effects of the current global recession on employment levels. Short-time work schemes have been regarded as a popular and successful counter-cyclical policy to maintain workers in employment. However, by comparing and contrasting the experience of Germany and Italy, we argue that the effectiveness of short-time work schemes should only be evaluated in relation to (i) the institutional set-up within which they operate, and (ii) the whole set of labour market policies adopted by each country

The Legacy of the Great Recession in Italy: A Wider Geographical, Gender, and Generational Gap in Working Life Expectancy

“…We also could not capture short spells of work, which were prevalent in the years of the crisis (Aricò and Stein 2012). Defining the employment status on the basis of annual spells has certain implications.…”

“…These important changes were accompanied by labor market developments and policy reforms relevant to the beginning and the middle stages of working life: namely, increased female labor force participation (Scherer and Reyneri 2008); delayed labor market entry because of more time spent in education (Billari and Rosina 2004;Billari and Tabellini 2010); labor market deregulation (Aricò and Stein 2012;Cirillo et al 2017); and a trend toward discontinuous employment and career trajectories among people of working ages (Barbieri and Scherer 2009). Despite these shifts, by Italian standards the country's labor market conditions before the crisis were generally considered favorable (Aricò and Stein 2012), including for young people entering the labor market (Mussida and Sciulli 2016).…”

“…Despite these shifts, by Italian standards the country's labor market conditions before the crisis were generally considered favorable (Aricò and Stein 2012), including for young people entering the labor market (Mussida and Sciulli 2016).…”

Macroeconomic Implications of the German Short‐time Work Policy during the Great Recession

“…This may be one additional factor in the successful safeguarding of jobs during the last economic slump (see Bogedan et al., , p. 20). This view is also supported by the analysis of Aricò and Stein (), who compared the use of STW in Italy and Germany. Whereas Italy relies exclusively on the use and amendment of STW (which has approximately as long a history as the German STW scheme), in Germany a whole range of instruments for internal flexibility is available.…”

Comparing Labor Market Performance: Some Stylized Facts and Key Findings

“…The literature on internal flexibility is still scarce, but the recent higher diffusion in several European countries of working time adjustments for mitigating the negative effects of the current crisis on employment levels, often favored by policy interventions, suggest the need for new studies. In this issue, Aricó and Stein (2012) analyze, for the very recent crisis years, the divergent effectiveness in Germany and Italy of short-time work schemes due to differences in the institutional set-up within which they operate and in the whole set of labor market policies adopted by each country. Also in this issue, Calavrezo and Lodin (2012) study the main characteristics of firms and employees involved in short-time working arrangements in France during the period 2007-2010 by using jointly firm-level data sets and the national labor force survey.…”