Was short-time work a miracle cure during the Great Recession? The case of Germany and Italy

This paper considers the use of short-time work schemes as a device to mitigate the negative effects of the current global recession on employment levels. Short-time work schemes have been regarded as a popular and successful counter-cyclical policy to maintain workers in employment. However, by comparing and contrasting the experience of Germany and Italy, we argue that the effectiveness of short-time work schemes should only be evaluated in relation to (i) the institutional set-up within which they operate, and (ii) the whole set of labour market policies adopted by each country.