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
Although reduced working time and furlough policy initiatives are widely regarded as important for economic and business reasons, little is known about their impacts on workers' mental health at the onset of COVID-19 pandemic. Using data from the UK Household Longitudinal Panel Study data from 2018 to February 2020 and April 2020 and change score analysis, this study aims to compare mental health changes between those who worked reduced hours, were furloughed and left/lost paid work. The results suggest that at the onset of COVID-19 reduced working time and furlough can protect workers' mental health, but only for men not for women. The gender differences remain significant even after controlling for housework and childcare responsibilities at the onset of COVID-19. These results highlight the importance of distributing paid work more equitably and formulating gender-sensitive labour market policies in protection of workers' mental health.