TY  - RPRT
        AU  - Braun, Helge
AU  - Brügemann, Björn
        TI  - Welfare Effects of Short-Time Compensation
        PY  - 2014/Oct/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 8597
        UR  - https://www.iza.org/index.php/publications/dp8597
        AB  - We study welfare effects of public short-time compensation (STC) in a model in which firms respond to idiosyncratic profitability shocks by adjusting employment and hours per worker. Introducing STC substantially improves welfare by mitigating distortions caused by public unemployment insurance (UI), but only if firms have access to private insurance. Otherwise firms respond to low profitability by combining layoffs with long hours for remaining workers, rather than by taking up STC. Optimal STC is substantially less generous than UI even when firms have access to private insurance, and equally generous STC is worse than not offering STC at all.
        KW  - short-time compensation
KW  - unemployment insurance
KW  - welfare
        ER  -