Short-Time Compensation: Is Germany’s Success with Kurzarbeit an Answer to U.S. Unemployment?

Abstract

The recent financial crisis caused a global recession that affected the economies of both the United States and Germany. While the ranks of jobless workers expanded in the U.S. and unemployment remain high, Germany’s labor market was less affected by the recession because of its success with Kurzarbeit, a work sharing program. Germany’s experience with Kurzarbeit can provide the United States with useful insights to improve its own version of work sharing—short-time compensation—to better combat unemployment.