Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/214935 
Authors: 
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper No. 7933
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Working time account is an organization tool that allows firms to smooth their demand for hours employed. Descriptive literature suggests that working time accounts are likely to reduce layoffs and inhibit increases in unemployment during recessions. In a model of optimal labour demand I show that working time account does not necessarily guarantee less layoffs at the firm level. These may be reduced or increased depending on whether the firm meets economic downturn with surplus or deficit of hours and on how productive the firm is. In expected terms, however, working time account reduces net job destruction at almost any level of firm's productivity. Model predictions are consistent with dynamics of aggregate turnover in Germany during the Great Recession.
Subjects: 
labour demand
working hours
working time account
turnover
layoff
Great Recession
Germany
JEL: 
J23
J63
Document Type: 
Working Paper
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