ABSTRACT
Germany and the United States pursued different economic strategies to minimise the impact of the Coronavirus Crisis on the labour market. Germany focused on safeguarding existing jobs through the use of internal flexibility measures, especially short-time work (STW). The United States relied on a mix of external flexibility and income protection. On this basis, we use macroeconomic time series to examine the German strategy of securing employment through internal flexibility by contrasting it with the chosen strategy in the United States. In Germany, temporary cyclical reductions in working hours are mainly driven via STW. US unemployment rose at an unprecedented rate, but unlike in previous recessions, it was mostly driven by temporary layoffs. However, a closer look at the blind spots of the chosen strategies in both countries showed that despite the different approaches, people in weaker labour market positions were less well protected by the chosen strategies.
ABSTRACT
How important is the relaxation of contact restrictions for the recovery of the German economy and what conclusions can be drawn for the appropriate level of contact restrictions in the coming months? In considering these issues, an attempt will be made to assess what significance the contact restriction measures introduced by the federal and state governments since mid-March 2020 will actually have for the current slump in economic activity in Germany. In addition, the various plausible scenarios for the spread and containment of infection are presented with different options for easing contact restrictions.