Some Surprising Facts about Working Time Accounts and the Business Cycle

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 8890

Classification and Topics

• Classification: Wirtschaft ; Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy: General (includes Measurement and Data) ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Demand and Supply of Labor: General ; Wages, Compensation, and Labor Costs: General
• Subject: working time accounts ; short-time work ; business cycles

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Balleer, Almut ; Gehrke, Britta ; Merkl, Christian
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/110136
• Last update: 10.03.2025, 11:45 AM CET