Employers' selection behavior during short-time work

During the recession of 2008-09 Germany experienced a huge decrease in GDP. Employment, however, remained surprisingly stable. The so-called German labor market miracle is often ascribed to the intensive usage of short-time work. Despite the resurgence of this instrument, little is known about the employees affected by it. This paper analyzes whether employers select certain individuals for short-time work, where special focus is given on the effect of human capital. The analysis is based on a unique linked-employer-employee data set on short-time workers in the district of the employment agency of Nuremberg. We use methods of event history analysis to estimate transition rates from regular employment to short-time work. Our results indicate that employers select a broad range of workers for STW, irrespective of their level of human capital. Fears that short-time work is mainly applied to a certain group of workers are not confirmed.