The World of Economics Explained: Short-Time Work - The German Model

Synopsis

Susanna Schmitt works at a chemicals company in Germany, where her hours have been cut due to the coronavirus crisis. Instead of facing layoffs, her employer has enrolled in the short-time work scheme, part of Germany's unemployment insurance system. This program allows companies to retain employees while providing partial unemployment benefits. In April 2020, nearly a third of the German workforce was on short-time work, a strategy that has saved jobs during previous economic downturns, including the 2009 financial crisis.