How much of that can be ascribed to the Kurzarbeit program?
Berger: Unemployment figures barely moved during the recession, which is quite remarkable. Some observers even talk of an employment miracle. Things can change, though. And while employment has held steadily, hourly work numbers have decreased quite substantially. What we see is to a large extent the impact of past labor market reforms, which made labor markets more flexible. Today, collective bargaining agreements often include clauses that allow companies to adjust the amount of time worked, something which was used quite extensively during the recession. But the Kurzarbeit program―essentially a government subsidy for short-time work―also played a very important role. At its peak, the program supported work time reductions for 1.5 million employees, a figure that amounts to about 3.5 percent of the total labor force. This is really quite an astonishing number. The scheme is effective because it encouraged burden sharing between employers and employees and prevented unemployment. Rese
