Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/110136 
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers No. 8890
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
Working time accounts (WTAs) allow firms to smooth hours worked over time. This paper analyzes whether this increase in flexibility has also affected how firms adjust employment in Germany. Using a rich microeconomic dataset, we show that firms with WTAs show a similar separation and hiring behavior in response to revenue changes as firms without WTAs. One possible explanation is that firms without WTAs used short-time work instead to adjust hours worked. However, we find that firms with WTAs use short-time work more than firms without WTAs. These findings call into question the popular hypothesis that WTAs were the key driver of the unusually small increase in German unemployment in the Great Recession.
Subjects: 
working time accounts
short-time work
business cycles
JEL: 
E20
E24
J20
J30
Document Type: 
Working Paper

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