| Description |
1 online resource (37 pages) |
| Series |
1\ IMF Working Papers, 1018-5941 |
|
IMF Working Papers; Working Paper ; No. 2021/242
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| Summary |
Kurzarbeit (KA), Germany's short-time work program, is widely credited with saving jobs and supporting domestic demand during the COVID-19 recession. We quantify the impact by exploiting state-level variation in exposure to the pandemic shock and KA take-up. We construct a shift-share measure of the labor demand shock and instrument KA take-up using the pre-existing, state-specific share of workers eligible for KA. We find, first, that KA was crucial in mitigating unemployment: absent its expansion the unemployment rate would have increased by an additional 3 pp on average at the trough of the recession. Second, KA also bolstered domestic demand: the contraction in consumption could have been 2 to 3 times larger absent the program. Finally, we provide preliminary evidence on the sensitivity of the medium-run reallocation of resources to the prevalence of jobretention schemes during the Global Financial Crisis |
| Notes |
Description based on print version record |
| Form |
Electronic book
|
| Author |
Dao, Mai Chi
|
|
