Sample Economics Paper on The Influence of the Labor Market Instrument Short-Time Work on the Outdoor Sports Segment Hiking in the Corona Crisis

The Influence of the Labor Market Instrument Short-Time Work on the Outdoor Sports Segment Hiking in the Corona Crisis

 

1. Introduction

1.1 Overview of the Corona Crisis

The world is in the midst of the COVID-19 (coronavirus disease 2019) pandemic that is caused by SARSCoV-2 (Severe Acute Respiratory Syndrome Coronavirus 2, often shortened to coronavirus). This is having a greater impact on human health and the global economy than any other health crisis in the last 100 years. Several papers and reviews have been undertaken to answer questions that are currently being asked by athletes, coaches, exercisers, physicians, sports functionaries and owners and users of sports facilities. On the 30th of December 2019, a cluster of pneumonia cases of unknown cause was reported on the ProMed-mail website (a website for monitoring emerging diseases). This outbreak was linked to a seafood market in Wuhan, China. On the January 8 2020, ProMed-mail then reported that the outbreak was linked to a novel coronavirus. The risk that coronaviruses in wild animals can cause zoonotic, species-switching diseases in humans had been highlighted thirteen years before the current outbreak.[1] On January 28, 2020, a first case with the novel coronavirus SARS-CoV-2 was laboratory-confirmed in Germany. At that moment, it was reported in the Epidemiological Bulletin 7/2019, that there were then 14 German cases that belonged to a joint outbreak with reference to Wuhan, China (cluster around a company based in Starnberg). The most common symptoms mentioned are fever, runny nose and cough. In addition, there are other general symptoms such as apathy, loss of appetite and weight, pain (headache, back pain, muscle pain) and nausea or vomiting. The age range is between 2 and 58 years. In addition to the 14 cases that were currently isolated in hospitals in Bavaria, two of the people repatriated on February 1, 2020 tested positive for SARS-CoV-2. By then, a total of 16 cases were known to be existing in Germany. The corona virus was declared a pandemic by the World Health Organization (WHO) on March 11, 2020. By then the novel virus had claimed the lives of 11,982 people in Germany (as of Nov. 12, 2020), according to the Berlin-based Robert Koch Institute.[2]

1.2 COVID-19 and the Employment and Social Situation in Germany

Employment in Germany kept growing steadily after the global economic crisis, rising from 40.9 million in June 2009 to 43.7 million in June 2016 and 45.3 million in June 2019 according to national statistics.[3] The number of employees subject to social security contributions grew from 27.6 million in 2009 to 31.4 million in 2016 and 33.8 million in 2019, an increase of 21% over the 10 year period. The monthly employment data for 2019 show a slowing down of employment growth in 2019.[4] Leading economic research institutes predict a severe economic recession at least for 2020 as an effect of the coronavirus pandemic. The joint group of forecasting institutions projects the GDP to shrink by 4.2% in 2020.[5] It is predicted that a total shutdown of the economy will cost between EUR 255 billion and 495 billion.[6] The Federation of German Industries expects German GDP to shrink by 3-6% in 2020 due to the coronavirus crisis. Also, there were 3.56 million self-employed persons in Germany in 2018. The share of self-employed in total employment decreased from 10.5% in 2004 to 8.8% in 2018, with shares of employers and own-account workers also decreasing.[7] One explanation for the recent decrease in self-employment is that the labour market has increasingly offered more attractive employment opportunities. Employment growth was driven by rising labour demand linked to the sustained economic growth of the past decade. The global economic crisis had only a small negative effect on the number of employed subject to social security thanks to the extensive use of short-time work schemes and working-time accounts, and the German economy recovered quickly. The increased employment rates accounting for employment growth were particularly sizeable for women, older workers and foreigners.[8] Both the unemployment rate and the inactivity rate were accordingly reduced. Immigration also generated employment growth. Skill shortages or the threat of skill shortages, and strategies to overcome them, have been at the centre of public and political debate for many years. Generally, it is difficult to measure the extent of the shortage as companies react by pursuing other strategies, such as outsourcing, offshoring or continuous training of their own staff. In the event of skill shortages, companies may also be constrained to downsize their activities and refrain from exploiting market potentials or seizing opportunities to increase productivity.[9]

Nevertheless, an analysis of skill shortages has been carried out by the German Federal Employment Agency, which is the Germany Public Employment Services. The main indicators used are how long it takes to fill a vacancy registered at the German Federal Employment Agency, and the job seeker/vacancy ratio. In 2008, during the economic and financial crisis, the ratio of unemployed to registered jobs was around 806 to 100, and 232 to 100 in 2019 (meaning that on average there are two unemployed per vacancy.[10] From a sectoral perspective, skill shortages occur mainly in the health sector, the construction sector and some manufacturing industries, as well as the ICT sector and in ICT roles across all sectors. Assessment of bottleneck occupations is the basis for establishing a white list for immigration.[11] In 2011, the government announced its strategy to secure skilled labour, based on five pillars:

  1. i) access to education for all;
  2. ii) skills development (initial and continuous training);

iii) activation policies and securing employment;

  1. iv) reconciliation of work and family life;
  2. v) integration and immigration of skilled labour.

Recent policy initiatives, such as the new law on immigration and the new strategy to promote continuous education and training are in line with this strategy. Trade unions especially have argued that low wages and poor working conditions would need to be addressed to overcome skill shortages. For example, in the healthcare and old-age care sectors, bad working conditions are thought to contribute to high labour turnover and shortages of skilled workers.[12]

1.3 Unemployment in Germany during the COVID-19 Pandemic

Unemployment in Germany has substantially grown as a consequence of the corona pandemic. 2.70 million People were registered unemployed in Germany in 2020 on an annual average, 429,000 or 19 per cent more than a year before.[13] The increase is most of all attributable to fewer people successfully ending their unemployment or job-seeking by taking up a job. A minor role has also been played by the higher number of job redundancies. The unemployment increases would possibly have been much higher still without short-time work. In April 2020 – the month with the highest number of claims – businesses received short-time working allowance for 6.00 million people. The loss of working hours meanwhile amounted to 50%. This means in mathematical terms that the jobs of around three million people could be saved in the peak period. The economy picked up speed again in the course of the year, and the short-time work was markedly reduced.[14]

Compared with other European countries, Germany seems to have low unemployment figures. But in spring 2020, uncertainty arose about the further development on the labour market and of the whole economy as the country was hit by the lockdown to tackle the Corona pandemic. Although first measures to ease the situation came into effect in April, unemployment rose in that month and later. Normally a seasonal upturn is typical for springtime, but then observers spoke about the beginning of the terrible recession.[15] In Germany in November 2020, a new lockdown light began in order to reduce the number of infections with the Corona virus. These measures included among others the closure of gastronomy, tourism industry and leisure activities. But with the approach of the cold season, the number of infections was rising. Calls for the sharpening of the measures became louder and on December 16th, a new lockdown started. Now even shops had to close unless they sold products essential for the daily life. This second lockdown was longer than the first one. In many parts of Germany, business returned to normality not before late spring 2021, depending on the local situation. In summer 2021, German politicians want to avoid another lockdown. A high rate of vaccinated people seems to be the way out of the pandemic. Now the country is beginning to be touched by the fourth wave caused by the delta variant. But the number of infected people needing inpatient treatment is lower than during the earlier waves. New restrictions will depend on the situation in the hospitals.[16]

German politicians are proud of having kept the unemployment at a com-paratively low level by the use of short-time working arrangements. When such an arrangement is made, the working hours of an employee are reduced and the employee may benefit from short-time working allowance paid by the public unemployment insurance. This support normally amounts to 60% or 67% of the difference between the wage in the time with reduced working hours and the wage in times of regular work. Those beneficiaries are not included in the number of unemployed people. But we should consider that German law even allows the reduction of working time to zero. Such a reduction does not prevent the granting of this aid. But the real amount of people out of work is being hidden.[17] In July 2021, approximately 2.590 million men and women were without work in Germany, a country with a population of approximately 83 million people. The number of unemployed men and women fell by 24,000 compared with the previous month and by 320,000 compared with July 2020. The official unemployment rate provided by the German Federal Employment Agency (Bundesagentur für Arbeit) is 5.6%.[18] From January 2014 to October 2019, the monthly unemployment rate was lower than the rate in the corresponding month a year ago. There was no difference in the rate from November 2019 to March 2020. After a long time, April 2020 is the first month with a higher rate than twelve months ago. Now the impact of the virus on the labour market is weakening. The rate of July 2021 is 0.7 percentage points lower than a year ago, but by 0.6 percentage points still higher than 24 months ago.[19] The methods used by the German employment agency are different from the standards used by the International Labour Organization (ILO). If the concept of the ILO is used, the unemployment rate is 3.7% according to the ILO standards in June 2021).[20] The situation on the labour market continues to improve. Unemployment and underemployment continued to fall strongly despite the start of the summer break. According to the German Federal Statistical Office, 44.84 million people were in gainful employment in Germany in June 2021 (a plus of 162,000 compared with June 2020). In May 2021, 33.73 million people had a job that was subject to social insurance contributions, the agency told (a plus of 402,000 compared with last year). In July 2021, the Federal Employment Agency registered 744,000 job vacancies, 171,000 more than a year ago. The underemployment was at 3.379 million people, 294,000 more than last year’s July.[21]

The number of short-time workers at the end of 2020 nonetheless still exceeded the peak value during the financial and economic crisis of 2009. In times of the Corona pandemic, short-time working allowance becomes more important. Its purpose is to avoid unemployment. Employees who benefit from this financial support are not registered as unemployed and are not included in the monthly unemployment rate. When the demand for the company’s products or services shrinks, the employer may reduce the working-time of the staff. Short-time working allowance now comes as a compensation for the loss of wage caused by the reduction. The help paid by the Federal Labour Agency generally replaces 60% of the difference between the wage paid during regular working time and the wage paid in times with reduced working time. For those who care for a child, 67% will be granted.[22] As a relief in the pandemic, short-time working allowance was raised to 70% from the fourth month and to 80% from the seventh month of receiving this benefit (77% or 87% in case of parents). The German social security system also allows the reduction of working time to zero hours. It does not hinder this support from being granted if the employer is willing to call back the employee after the crisis.[23] Employees cannot apply themselves for this benefit, but their employer can do so. The company must submit a written report to the local office of the Labour Agency by the end of the first month in which short-time working allowance should be paid. From July 1 to July 25, the Labour Agency received notices for short-time working for approximately 75,000 employees. In May 2021, short-time working allowance was paid to 2.23 million employees. The number is falling. It reached its peak in April 2020 with nearly six million beneficiaries.[24]

Whenever a company introduces short-time working, the employer pays both the reduced wage and the short-time working allowance to the employees. After this, the employer sends a payroll list with the names of the workers with reduced working time to the Labour Agency. This must happen within three months. The agency checks the documents and pays the allowance to the company. By this procedure, the agency is unable to announce the actual number of people who benefit from this support together with the publication of the unemployment figures. Short-time working is generally limited to twelve months. As a further help in the pandemic, the limitation has been prolonged to 24 months but not longer than the 31 December 2021 if the beneficiary has initially been entitled to this support in 2020.[25]

1.3.1 The Meaning of Unemployment in Germany

In Germany, a job seeking person is unemployed if she or he is able to work, does not work 15 hours a week or longer and is registered as an unemployed person at the local labour agency’s office or job centre. The unemployed person must look for an occupation that lasts at least 15 hours a week. Further on, only a person who has not yet reached the retirement age and is not on sick leave can be unemployed. The unemployed must be willing to work and accept any work, he or she has not the right to accept only a work that is similar to the previous one. An unemployed person who is 58 years old or more and receives welfare benefits for at least 12 months and has not got a job offer by the labour agency will not be counted as unemployed.[26]

1.4 COVID-19 Trends in Germany

The world is in the midst of a global pandemic and all countries have been impacted significantly. In Europe, the most successful policy response to the pandemic has been by Germany, as measured by the decline in new COVID-19 cases in recent weeks and consistent increase in recovered’ cases. This is also reflected in the COVID-19 related mortality rate per million people, it is 58.63 per million people as compared to that of Spain, which is 446.28.[27] One critical aspect of German policy response has been in their systematic reporting of daily data that is highly disaggregated, which makes it possible to analyze key characteristics of the COVID-19 outbreak in Germany and improve our collective understanding of the global pandemic. Data from the situation reports made by the Robert Koch Institute (the German government’s central scientific institution in the field of biomedicine) showed that the COVID-19 related mortality rate in Germany is rising significantly with age and over time, for all age groups in the population; the mortality rate is systematically higher for men compared to women in all age groups; and the difference in the mortality rates of men and women have increased with time. In the early stage of the COVID-19 outbreak in Germany, mortality rate of men (for all age groups) was only slightly higher than mortality rate of women. This difference, however, has grown significantly to the point that the overall mortality rate of men is now 50% greater than the mortality rate of women.[28]

COVID-19 related mortality rate is higher for men than women across several countries. Existing studies have documented biological as well as behavioral reasons for this. A 2017 study in the Journal of Immunology studied the SARS outbreak in 2003 to determine the reasons why coronavirus that causes SARS seems to affect men more than women. In that study, researchers found that male mice were more susceptible to the virus. But when they blocked estrogen from working normally in the female mice, the females fell ill at higher rates.[29] Behaviorally, smoking is a common explanation for gendered outcome of respiratory ailments. Existing research shows that 54% of Chinese adult men are smokers while only 2.6% Chinese women smoke. Similarly, a World Bank report states that 41% of South Korean men smoked, versus as against 6% of women. The trends are similar in Spain and U.S., but the difference in smoking between genders in Germany is not as large.[30] The same study analyzed how the COVID-19 infection is spread across different age groups in the German population. The main results show that distributions of confirmed COVID-19 cases across all age groups show an increase with time, and that the infection is not linearly related to age. While population above 80 years of age are most susceptible, it is people in the working age group (15-59 years) that are more susceptible than people 60-79 years of age. This is an important feature of the COVID-19 outbreak in Germany. This could be due to early policies enacted to isolate and safeguard the older population, while working age groups are physically more mobile and have a higher probability of contracting the virus from others. The results show that the younger age groups have significantly lower infection rates.[31] From the study, the COVID-19 trends reveal that the majority of COVID-19 cases now are females, even though they were a smaller proportion in the beginning of the outbreak. The mortality rate per 100,000 population has been increasing with time, for all age groups in the population. Remarkably, the mortality rate of men is rising significantly faster than mortality rate for women in Germany, for all age groups. The infection rate across age groups showed that people in the working age group (15-59) are far more susceptible than older population in age group 60-79 years. The overall infection rate is growing with time for all age groups. Germany’s response to the COVID-19 outbreak is of enormous interest to the hotspot nations on account of its population size and early successes. Germany has managed to lower the number of active COVID-19 cases while simultaneously improving the recovery rate and maintaining a low mortality rate. There are, however, significant variations across gender and age groups in the spread of the infection and lives lost to it.  While Germany is ahead of its neighbors in managing the pandemic, these critical trends hold potential lessons for other countries tracking the spread of the pandemic among various subpopulations.[32]

1.5 COVID-19 Lockdown

In December 2019, the COVID-19 outbreak was registered in Wuhan China. The World Health Organization declared it a Public Health Emergency of International Concern on January 30, 2020 and escalated it to a pandemic on March 11, 2020. The disease has been recorded in over 200 countries and territories with several millions of confirmed cases and a case mortality rate of around seven percent.[33] In the early stages of the outbreak, attempts were made to trace every infection back to its origin. Tracing back to the index case on an international level soon became impossible and most countries responded by imposing restrictions on international travel. After spreading around the world at an alarming rate, the World Health Organization (WHO) declared COVID-19 as a pandemic on the 11th of March 2020.[34] Governments are taking unprecedented measures to limit the spread of the virus with the aim of eventually containing this pandemic. As such, COVID-19 has massively affected the lives of people all over the world. Countries have taken drastic measures to contain the outbreak. In Europe, several countries have implemented national lockdowns, limiting all non-essential travel. The societal impacts of both the virus and the measures taken to reduce its spread are severe. The circumstances result in a unique situation in which people have had to change their daily lives radically, often within the span of days or weeks. People’s activity patterns, the way they work and how they travel are three facets of daily life that have changed drastically.[35]

In the later stages of the epidemic, a number of non-pharmaceutical interventions (henceforth NPIs) were undertaken, which were of a domestic nature revolving around the idea of social distancing. The aim of these interventions was to slow down the pandemic by restricting mobility so that it does not overwhelm health system capacities. The COVID-19 pandemic presents not only a global health crisis but has also disrupted the daily lives of people around the world. From a leisure perspective, urban outdoor enthusiasts are one group particularly impacted by the pandemic and the subsequent institutional response. Stay-at-home orders and physical distancing recommendations serve as potential inhibitors to outdoor recreation activities central to the lifestyles and wellbeing of outdoor enthusiasts. In urban areas, where these orders and recommendations are most restrictive, the potential impacts on recreation behavior are most consequential. A study that compared the impact of COVID-19 on the recreational behaviors of outdoor enthusiasts across urban and rural communities showed that the frequency of outdoor recreation participation, distance travelled to participate in outdoor recreation and distance travelled beyond roads during outdoor recreation have declined significantly more among outdoor enthusiasts residing in urban areas than urban clusters or rural areas.[36] The COVID-19 health crisis has turned into a global economic crisis, putting at risk the health, jobs and incomes of millions of people around the world. The strict containment measures adopted by many countries first half of 2020 to flatten the rise in contagion put a substantial brake on most economic and social activities.[37] The collapse in total hours worked, and the decline in participation, has not been seen in peacetime since the Great Depression. There are signs that the trough of the sharp and deep global economic recession has been reached in many economies. However, ensuring that the recovery is rapid and sustained, and rebuilding a more resilient and inclusive labour market, remain considerable challenges.[38]

Apart from decimating lives, the corona virus also resulted in an unprecedented economic haemorrhage. By March 2020, the country instituted an unprecedented Lockdown, which invoved the shutting down of public life to limit contacts in an effort to stop the spread of the virus. All shops, companies, restaurants and many other institutions had to close due to this measure, so that the economy was hit hard. In order to survive, many companies that were affected by this crisis took the opportunity to send their employees on short-time work in order to save costs, but at the same time to preserve jobs. According to the German Federal Employment Agency, around six million people were on short-time working in April 2020. This significantly exceeded the previous record month of May 2009, when 1.44 million people were on short-time work.[39] Consequently, those in the labor force spent less time at and with work. The logical conclusion is that people on short-time work have more free time. Other victims of the lockdown and contact restriction were institutes such as gyms and gymnasiums as well as the complete mass sports. For these reasons it was no longer possible to do sport within a team or group. Therefore, sports activities alone in the open air, also called outdoor sports, were practiced more and more. In order to do these outdoor sports it makes sense to own or to buy suitable outdoor equipment.

1.6 The Impact of COVID-19 on the Labor Market in Germany

Forecasts on the economic impact of COVID-19 released in March 2020 had been rather optimistic, especially concerning the labor market impact.[40] However, assessments released until June 2020 were significantly more negative: For example, the federal government and the German Council of Economic Experts expected GDP to fall by 6.3 or 6.5 percent in 2020 by that time.[41] Forecasts from September and October 2020, which had been released before the reinstatement of a national (partial) lockdown in early November, expect GDP to decline by up to 6 percent in 2020, but these assessments are generally again more optimistic and argue in favor of a V-shaped recession with economic recovery in 2021, involving GDP growth of 4 to 5 percent in that year.[42] In October 2020, the number of registered unemployed stood at 2.75 million persons, an increase by 25 percent compared to October 2019. A decomposition exercise shows that about a quarter of the COVID-19 impact on unemployment is due to relatively fewer underemployed persons (e.g., as active labor market policy measures have been substantially reduced, individuals who would have otherwise been excluded from official statistics are now counted as registered unemployed), an additional quarter is due to increased layoffs, and about one fifth is due to reduced hiring activities.[43] Employment in Germany, however, has not declined significantly yet; and it appears as if the COVID-19-induced rise in unemployment has been stopped for the time being – there has been practically no additional COVID-19 impact on unemployment since July 2020. However, short-time work (STW) is still extensively used in Germany, and the future employment perspectives of these short-time workers are – at least to a certain extent – unclear. In April 2020, the number of short-time workers reached almost 6 million, their number still stood at 5.9 million in May 2020, but decreased to about 2.6 million until August 2020. This also means that STW in the current crisis has reached significantly higher levels than during the Great Recession where the peak was at about 1.5 million short-time workers.[44] Although these numbers still involve a larger degree of uncertainty, are only reported with substantial time lag and may be subject to revisions,1 also the most recently available updates and forecasts indicate a continuous decline, implying that the share of short-time workers among all employees that are subject to social security contributions fell from a peak of 20 percent in April 2020 to about 10 percent in October 2020. Business confidence stood at a historical low in April 2020. It has been increasing since then until September 2020, when it slightly dropped again in October 2020.[45] Yet, unemployment figures not only increased because of increased layoffs, but to a similar extent also because of firms’ reduced hiring activities, resulting in fewer exits from unemployment.[46] The demand for new workers had literally collapsed, especially in April and May 2020, when the number of vacancies declined sharply.[47] Compared to one year before, the stock of posted vacancies is still more than 20 percent lower in October 2020. Labor demand is thus low, but it has stabilized for the time being. Unemployment risks are particular high in some sectors, including hotels and restaurants, retail, various other service sectors, and to some extent even health and logistics.[48] These sectors have been either directly affected by restrictions on economic activities and social contacts, or indirectly via disrupted value chains, or simply by a sharp drop in demand. However, quite a few sectors in the German economy remain relatively unaffected (e.g., the public sector, the finance sector, education, and agriculture).[49] In terms of most vulnerable groups, employment losses can be expected to be particularly concentrated among workers with fixed-term contracts, temporary agency workers, marginal part-time workers, self-employed and freelancers. For example, one in four solo self-employed workers considers it very likely they will have to give up their own solo self-employment within the next twelve months.[50]

The crisis also poses an additional challenge for the labor market integration of the recent cohort of humanitarian migrants that arrived in Germany after 2015. Firms with liquidity problems already before the current crisis are at a high risk of bankruptcy. This risk may be particularly concentrated among SMEs with severely restricted economic activities, such as restaurants, small retail shops, and travel agencies. But it appears too early for an assessment: Due to changes in insolvency law, the precise extent to which these firms will ultimately go out of business will only become apparent in early 2021.[51] From the current perspective, a scenario therefore appears plausible – also when considering other factors and ongoing developments – in which the number of unemployed in Germany continues to rise towards 3.5 million by spring 2021 (starting from 2.75 million in October 2020). The volume of STW is likely to decline further in the course of 2020, but may still correspond to around two million employees by the end of 2020. However, this figure could only gradually decline in the course of 2021 because the maximum period during which STW compensations are paid has been extended to 24 months. Hence, also an increase of hidden unemployment can be expected (on the one hand due to STW, on the other hand due to increased withdrawal from the labor market).[52]

1.7 The Impact of COVID-19 on Travel Behavior

The global Coronavirus (COVID-19) pandemic is having a great impact on all areas of the everyday life of people worldwide including travel behaviour. Countries have been implemented various measures that focus on restricting social contacts and reducing in this way the spread of the virus. In 2020, in most of the federal states in Germany kindergarten, schools and universities have started closing on March 16th.[53] The German Foreign Office issued a worldwide travel alert and warns against unnecessary travel abroad on March 17th; border controls and entry ban were introduced at the borders to France, Austria, Luxembourg, and Switzerland. Few days later, on March 22nd, the German Government announced a nationwide  Corona-related contact ban with wide implications for the daily life of the population, including closed restaurants, cafés and also hairdresser, only two persons from different households being allowed to meet in public, and for many of the German working population, when possible, work from home. This first lockdown was extended on April 1st to April 19th and was accepted, i.e. implemented, by all federal states. As the German Government started to relax the Corona virus related restrictions, Saxony was the first federal state in Germany which made face covering mandatory in shops and when using public transportation on April 20th. The other states followed its example. Mobile phone data analyses show for instance a decrease in trip rates by 39% in the strictest lockdown period between end of March and beginning of April.[54] Further studies suggest that in the same period around one quarter (25%) of the working population in Germany worked in home-office, up to 10% worked short-time[55] and about 69% of the population over 18 had as a results of the restrictions no physical contact at all to friends, relatives and/ or colleagues – compared to 17% at the beginning of March.[56] Moreover, the number of people who purchase groceries at least occasionally online doubled – from 16% before to 30% after the Corona outbreak. These numbers give first insights into changes of daily activity- and travel-related behaviour due to the Corona crisis.[57]

However, because of the novelty of the situation, still little is known about how different user groups adapted their daily mobility and travel behaviour, the reasons behind, beyond the government restriction, and the potential implications for travel patterns after the Corona crisis. Besides analysing potential mid- and long-term impacts, understanding how daily activities and travel behaviour change during such global crisis and the reasons behind is crucial for developing suitable strategies for similar future events. The effects of the Coronavirus-spread on activity and travel behaviour patterns have been already addressed in early studies in different countries around the world.[58] Most of the studies looked at travel pattern changes as well as changes in working and shopping behaviours (including working in a home-office and e-commerce, i.e. online shopping). Various methods have been applied, e.g. online surveys[59] and objective data measures via GPS Logger and Travel Diary App.[60] Further research works focus on the implications of the global pandemic for the relation between transport and wellbeing in the context of the pandemic as well as for the future agenda for policy and practice. For instance, the link between travel behaviour, especially hypermobility or active travel, and public health that became more present in the event of Coronavirus outbreak and derived policy implications has been studied.[61] Other studies have performed an analysis of the role of transport accessibility within the spread of the Coronavirus and proposed tailored policy strategies for managing the spread of the virus depending on the accessibility level of the area.[62] Other studies proposed the concept of Responsible Transport which is a transport policy approach that considers besides environmental aspects also public health and wellbeing issues.[63] All in one, the mentioned studies stress the importance of looking deeper into the effect of the pandemic on travel behaviour in order to develop more robust and sustainable transport policy and practice strategies and measures.

1.8 COVID-19 and Outdoor Sports Activities

 

Then the COVID-19 pandemic hit. On March 11, 2020, the World Health Organization declared the global spread of Coronavirus COVID-19 as a pandemic. There are several ways in which the COVID-19 pandemic in general, and specific COVID-19-related restrictions at outdoor recreation sites in particular, can affect recreation visitation behavior.[64] First, if a site such as a National or State Park completely closed down for a period of time due to COVID-19, people would not be allowed to visit the site and would need to cancel or postpone planned visits. Second, in the case of newly reopened sites or sites that never completely closed, people may be hesitant to visit due to perceived risks of contracting or spreading the COVID-19 virus. If this perceived risk is high enough, people may also be induced to cancel or postpone planned trips to outdoor recreation sites. Third, if perceived risks do not reach a cancellation threshold, people may go ahead and complete any planned visits to sites that are open or substitute visits from closed to open sites. The value of their experiences would reflect the net effects of COVID-19 restrictions and other site quality aspects, such as accessibility and the level of congestion. It is also noted that time constraints and time use have been influenced by the pandemic. As many people have been working from home or become unemployed, they may have more time available for leisure activities. Simultaneously, the availability of some indoor leisure activities (such as movie theaters, museums, and shopping malls) has become restricted. This may lead people to engage in more outdoor recreation, which has been deemed safer than congregating indoors (though this realization only occurred later in the summer of 2020, and some may still be resistant to taking risks with outdoor recreation).[65] The popular media is replete with reports on the effects of the COVID-19 pandemic on economic activity, including some information on recreation and tourism decisions. Significant data on people’s attitudes toward public health and safety provisions has been generated and estimates of the direct economic costs of the pandemic are beginning to appear.[66] We do not know, however, what effects COVID-19 related recreation site closures, visitation restrictions, and recreation trip cancellations has had on nonmarket values held by outdoor recreation participants.

1.9 COVID-19 and Short-time Work

The COVID-19 pandemic has generated renewed interest in short-time work programs—the state-sponsored work-sharing schemes aimed at saving jobs. Short-time work – also called short-time compensation – is a subsidy for temporary reductions in the number of hours worked in firms affected by temporary shocks.[67] Short-time work programmes allow employers who experience temporary drops in demand or production to reduce their employees’ hours instead of laying them off. Employees receive from the government a subsidy proportional to the reduction in hours. Germany’s short-time work program, Kurzarbeit, is widely considered the gold standard of such programs.[68] Germany’s short-time work scheme, was instrumental in keeping employment stable during the global financial crisis. However, the current COVID-19 crisis is likely to be even more profound, and affect more sectors of the economy. The short-time program is a social insurance program whereby employers reduce their employees’ working hours instead of laying them off.[69] Under Kurzarbeit, the government normally provides an income “replacement rate” of 60 percent (more for workers with children). That is, a worker receives 60% of his or her pay for the hours not worked, while receiving full pay for the hours worked. So, for example, a worker would only experience a 10% salary loss for a 30 percent reduction in hours. The program usually runs for a maximum of 6 months consecutively.[70] Short-time work is, in many ways, an excellent crisis management tool. In a deep recession, it protects workers’ income and therefore supports aggregate demand. Since workers do not lose their jobs, they have less incentive to save on a precautionary basis. And companies retain firm-specific human capital, while avoiding the costly process of separation, re-hiring, and training. It is also worth mentioning that short-time work is an addition to private working-hour flexibility arrangements. Employees in Germany are typically allowed to work overtime and accumulate credit on their “working time accounts”. These can then be drawn down during recessions with no effect on paychecks. Firms are allowed to use short-time work only when working time accounts are exhausted, which helps contain fiscal costs.[71]

Hoarding labour in the firm during a temporary negative shock enables the firm to keep specific human capital within the firm and avoid the costly processes of separation and then of re-hiring and training when economic conditions improve. For workers, it preserves experience and specific human capital and avoids the often very long-term career costs of layoffs.[72] Without short-time work subsidies, labour hoarding may be suboptimally low during temporary shocks because of commitment issues and/or difficulties to move resources across time. Liquidity constraints, for instance, prevent firms from insuring workers and will generate inefficiently high separations. Well-designed and targeted short-time work schemes can therefore be an effective tool to save jobs and businesses and to accelerate economic recovery.[73]

The sharp contraction caused by the public-health response to COVID-19 is a textbook case for the use of short-time work: it combines a mandated reduction in hours of work in many sectors due to confinement measures and a massive liquidity crunch for firms. In this context, short-time work can be much more effective than other forms of insurance such as unemployment insurance or universal transfers, and more efficient than other forms of wage subsidies.[74] As a result, short-time work schemes are now at the heart of the policy response enacted by various countries. Those with well-established short-time work programmes, such as France, Italy, Germany, and Belgium, have seen massive increases in uptake, compared with even the Great Recession. For example:

  • Estimates for Germany indicate that 2.35 million employees (almost 6% of total employment) will receive Kurzarbeit during the COVID-19 crisis, compared to 1.4 million at the peak of the Great Recession. Considering that Kurzarbeit cost approximately €5 billion in 2009 (Boeri and Bruecker 2011), we would expect spending on short-time work to climb to €8.4 billion today.
  • In France, 730,000 employees (2.8%) are currently being paid by the French short-time work scheme. In contrast, 227,000 employees were on short-time work at the height of short-time work utilisation in 2009.
  • In Belgium, 100,000 people were on short-time work at the peak of the Great Recession, while nowadays over 1 million are (22%).
  • In the US, 26 states already have short-time work schemes in place. The availability of the schemes should be advertised more and their scope extended to all states.

Still very little is known about the effectiveness of short-time work. It has been used before, especially during the Great Recession, but in a limited set of countries. A few recent papers have analysed examples of short-time work programmes in Europe, shedding new light on fundamental questions around the functioning of these schemes. The French case was studied using a combination of high-quality data and compelling identification strategies.[75] The Swiss STW case has also been studied using robust data.[76] Similarly, is a typical case study that has been extensively analyzed the Italian Cassa Integrazione Guadagni, one of the oldest and largest programmes as a typical genre in Europe.[77]

When the variation and eligibility rules across firms is exploited, it is found that short-time work has large positive effects on employment: firms receiving the subsidy experience a 40% reduction in hours worked per employee, and an equivalent increase in employment headcount.[78] Evidence from the French and Swiss cases documents the positive effects on employment and on firm survival.[79] Several studies have shown that short-time work has strong effects on liquidity-constrained firms that face a temporary demand or productivity shocks.[80] The programme enables these firms to engage in labour hoarding and recover more quickly after the shock, with positive medium-run effects on their workers. This is precisely the type of situation we are facing, which makes short-time work especially desirable.

One may worry that, by subsidising the preservation of existing matches, short-time work may prevent workers to move from low- to high-productivity firms during recessions. In this way, the policy may have significant negative reallocation effects in the labour market. In our paper, leveraging rich spatial variation in treatment intensity across more than 600 local labour markets in Italy, we estimate how an increase in the fraction of workers receiving the subsidy affects employment outcomes in non-treated firms. Studies have shown that despite short-time work having targeted predominantly low-productivity firms, reallocation effects are small. While such small reallocation effects were estimated among a much smaller number of workers than are involved today, we note that the current downturn is inherently a response to a public-health crisis and not an example of a market-led recession that is typically thought to generate ‘creative-destruction’ forces.[81]

 

1.9.1 Implementation of Short-time Work in Germany

In light of COVID-19, by now more than half a million businesses in Germany have implemented short-time work.[82] The temporary reduction of the regular working time allows companies to reduce their personnel costs while at the same time maintaining their workforce and avoiding layoffs. The gap in remuneration that the employees suffer is partially compensated by the Federal Employment Agency, which pays 60% (or 67% for employees with children) of the net loss in remuneration (up to certain salary levels) that results from the reduction of working hours.[83] Following implementation, employers are faced with a number of practical questions relating to the day-to-day management of short-time work and the financial impact certain circumstances might have. The following is meant to provide a brief overview of practicable issues employers have to handle during periods of short-time work.[84]

1.9.2. Additional/Alternative Occupation during Short-time Work

While many businesses were forced to introduce short-time work to their sites, there are shortages in other areas of so-called “system-relevant” professions and sectors . System-relevant professions and sectors cover services that are indispensable for the public life, security and the care of people. In particular, these include areas such as health care, energy and water supply, transport and passenger traffic, but also agriculture, food industry and the supply of food to people. In order to manage the aforementioned imbalance in the employment market, employees on short-time work are vested with the opportunity to support such system-relevant professions. From a German social security law perspective, employees are allowed to supplement their short-time work allowance by voluntarily taking up a second job in such system-relevant professions and sectors.[85]

1.9.3. Vacation during Short-time Work

Before the implementation of short-time work is considered unavoidable and short-time work allowance can be claimed, employers have to ensure any legacy vacation (e.g., 2019 vacation) is fully granted and taken. Vacation entitlements of the current calendar year are considered protected and do not have to be primarily used. Apart from that, unless otherwise agreed, the accrual of vacation entitlements continues during periods of short-time work. If the working time is reduced to zero hours (so-called short-time work zero – Kurzarbeit Null), according to two landmark decisions of the ECJ, it would generally be permissible to suspend the accrual of additional vacation entitlements for as long as short-time work continues. However, before using this option, it needs to be carefully assessed what the legal basis for existing vacation entitlements is and how this can be amended in an enforceable manner.[86]

Employees can continue to take vacation also during periods of short-time work. According to the functional guidelines of the Federal Employment Agency vacation can even be taken on single days without jeopardizing the ability to draw short-time work allowance (e.g., to bridge time between the end of a stretch of short-time work and a weekend) provided this is in line with the wishes of the employee. On the other hand, the Federal Vacation Act and various collective bargaining agreements require employers to grant a certain minimum period of uninterrupted vacation. Otherwise, the vacation entitlement is not properly fulfilled. Therefore, during periods of short-time work, employers should encourage employees to take longer stretches of vacation and avoid granting vacation on a single-day basis right before or after short-time work days. Compensation for vacation days has to be calculated based on standard compensation (i.e. as if, during the 13-week reference period prior to the vacation day, the employee’s remuneration was not reduced due to short-time work).[87]

1.9.4. Public Holidays Payment during Short-time Work

Working hours which are simultaneously lost as a result of short-time work on a public holiday and for which short-time work allowance is paid on days other than public holidays shall be deemed to be lost as a result of a public holiday. As a consequence, remuneration for public holidays has to be paid and borne by the employer. The Federal Employment Agency does not pay short-time work allowance for public holidays.[88]

1.9.5. Sickness and Remuneration During Short-time Work

If an employee becomes incapable for work due to sickness during periods of short-time work, the employee is entitled to short-time work allowance for the hours lost as a result of the short-time work (except on public holidays). If the incapacity for work due to sickness begins prior to the period of short-time work, the employee is not entitled to short-time work allowance for the hours lost due to short-time work but rather receives sickness benefits from the health insurance; in this case, the amount of the sickness benefits equals the short-time work allowance.[89]

1.9.6. Occupational Pension during Short-time Work

Company pension commitments are principally not suspended during a period of short-time work. The employer is therefore continuously obliged to pay the benefits or contributions that accumulate under an employer-funded company pension scheme. However, as many pension schemes use working hours- or salary-based elements in their formulas to define the payable pension or contribution amount, employers implementing short-time work may benefit from an indirect cost-saving effect.[90]

1.9.7 Disadvantages of Short-time Work

Some economists have argued that excessive reliance on short-time work during normal times could potentially reduce labor market flexibility, keeping workers in jobs that eventually need to disappear, and increasing the divide between workers in more and less protected segments of the labor market.[91] To avoid such outcomes, and limit the fiscal costs of the program, short-time work entails some co-financing components. In particular, the employer has to pay 80% of the total social security contributions owed on the reduced working hours. This cost-sharing element ensures that short-time work is not the first and only resort of employers who need to reduce production. But all parameters of the program—including the employers’ share of social security contributions—can be relaxed during a serious crisis to discourage mass layoffs. This was the case during the global financial crisis and it is happening again now. These cyclical adjustments to the program help strike a delicate balance between providing relief during deep recessions, while not introducing too much rigidity into labor markets during normal times.[92]

1.9.8 Effectiveness of Short-time work during the global financial crisis

Germany was the only G7 country that did not experience a fall in employment in 2009. Remarkably, this was the case despite a large contraction in GDP (of almost 6% points), owing mainly to a collapse of external demand. Work-sharing was an important factor explaining this success.[93] We estimate that about a third of the reduction in working time per employee was due to short-time work, with the rest explained by other margins of flexibility (such as running down working-time accounts and accumulated leave balances).[94] Other factors might have also been at play. It could be argued, for example, that the exceptional stability of employment in Germany during the global financial crisis was partly the result of earlier wage moderation, and a high degree of specialization of manufacturing workers, both of which made labor hoarding affordable for employers during the global financial crisis. The strong performance of employment during the global financial crisis bolstered domestic demand, with stable labor income supporting private consumption, and reducing the need for precautionary savings. This opened the way to a rapid recovery.[95]

1.9.9 Short-time Work and Welfare Consequences

Short time work (STW) policies provide subsidies for hour reductions to workers in firms experiencing temporary shocks.[96] They are the main policy tool used to support labor hoarding during downturns, and have been used aggressively since the start of the COVID-19 pandemic. Yet, very little is known about their employment and welfare consequences. The economic shock created by the COVID-19 pandemic has generated a sudden revival of interest in policies destined at encouraging labor hoarding during downturns. Short time work programs (STW), which are subsidies for temporary reductions in the number of hours worked, are the most emblematic of such policies, and are being aggressively used during the COVID-19 crisis, especially in European countries. While the fraction of employees on STW never exceeded 5% during the Great Recession, it has skyrocketed to unprecedented levels in Spring of 2020.[97] More than 20% of German workers were enrolled in a STW scheme in April 2020.[98] The same fraction is larger than 30% in Italy and France. Interestingly, despite the existence of similar schemes in a majority of US states, the policy response has been very different in the US. In the US, there is evidence that subsidized labor hoarding is almost non-existent and most of the shock is cushioned by unemployment insurance.[99] But what do we know about the effects of STW schemes? Are they effective in stabilizing employment and in helping firms hold onto their productive workers? Is it a more effective way to provide insurance to workers than unemployment insurance (UI)? And do we know anything about the welfare implications of STW schemes? While almost a third of the labor force is currently in STW programs in Europe, we do not have answers to these fundamental questions: we know close to nothing about the effects of STW and about its welfare consequences. This is all the more surprising given the large literature devoted to the use of other insurance programs over the business cycle, such as UI[100] or partial unemployment benefits.[101]

There are however three simple reasons that explain the very limited knowledge that we have of the effects and desirability of STW. The first reason is a critical lack of firm or individual-level administrative data on STW.[102] The literature on STW had to mainly resort to cross-country analysis.[103] Even in the presence of firm-level data, the second issue lies in the lack of credible sources of identification of STW treatment. In almost all countries with STW programs in place, there is no variation in firms’ eligibility to STW. The issue will be even more acute for the current recession, as most countries have purposefully extended STW access to every single firm. This severely complicates identification, with no obvious method to control for the selection of firms into STW take-up. Most papers therefore rely on the structure of calibrated models to analyze the effects of STW on workers and firms.[104] Alternatively, a few studies have tried to find instruments for the take-up of STW, for example instrument STW take-up during the Great Recession with firms’ prior experience with the program and find competing results.[105] More recently, a four strategy in the French context was proposed as being credible.[106] They instrument STW take-up using the proximity of a firm to other firms that used STW before the recession. As an alternative instrument, they use response-time variation in the administrative treatment of STW applications across French departments. They found large and significant employment effects of STW treatment. Another recent study also finds significant positive employment effects of STW in Switzerland during the Great Recession, comparing firms in the program to firms whose STW application was rejected.[107] The third issue behind our limited knowledge of STW is the lack of a framework to evaluate the inefficiencies that STW wishes to correct. STW may preserve employment, but how can we assess whether keeping such matches is welfare improving? While a small theoretical literature shows that STW may distort both hours and the allocation of workers across firms, thus reducing output,[108] there is no clear view of the conditions under which STW programs might be socially desirable and improve welfare.

1.9.10 Possible Impact of Short-time Work During the COVID-19 Pandemic

The pandemic is expected to have a much broader impact on the German economy than the global financial crisis. The global financial crisis mainly affected the manufacturing sector via collapsing import demand from trade partners.[109] In contrast, the confinement measures taken to fight the pandemic have forced temporary business closures in many sectors. Therefore, several changes to short-time work features have been implemented or announced, with a view to making the scheme temporarily more attractive to employers and employees alike. For workers, short-time work will now provide greater income protection if there is a prolonged reduction in work hours. The replacement rate, starting at 60% for the first three months, will increase to 70% during the 4th  to 6th months, and further to 80% from the 7th month. The maximum duration of the program has been extended to 21 months.[110] Moreover, the coverage will be expanded to temporary workers (about 2% of total employment). For employers, the most important change is that their social security contributions have been waived. The requirement to exhaust working-time account balances before claiming short-time work has also been suspended. Finally, firms no longer need to reduce working hours for at least 30 percent of their workers in order to be eligible for short-time work; the threshold has been lowered to 10%.[111] Together, these changes make the scheme much more attractive to employers. Short-time work already seems to be playing an important role in preserving jobs during the current pandemic. From the beginning of March to the end of April, the number of workers who applied for short-time work exceeded 10 million, or about 20% of the labor force—a much greater number than peak applications during the global financial crisis—while unemployment has increased by less than 0.4 million.[112]

Overall, the German government is doing precisely what should be done during deep recessions: making short-time work more flexible, more attractive to employers, and more generous to employees, while expanding coverage across sectors and across different types of jobs. This will come at an increased fiscal cost, but one that is well worth paying. However, the profound impact of this crisis on the labor market cannot be overcome by short-time work alone. The pandemic is affecting far more sectors than the global financial crisis which, for Germany, was mainly a manufacturing story.[113] In particular, marginal employees—who disproportionately work in the services sectors—do not make social security contributions, and are therefore not covered by short-time work. They are among those likely to suffer the most from the sharp recession. To avoid potentially large social costs, the government should consider alternative ways to provide income support for this vulnerable segment of the population.

1.9.11 Short-time Work Allowance

With the effects of the coronavirus pandemic permeating the German market, employers can take advantage of opportunities to reduce personnel costs and secure liquidity.  The use of short-time work compensation in particular can help here.  Among the measures adopted to mitigate the consequences, the regulations on short-time working have been made more flexible and adapted to the new requirements and situation.[114] The following applies accordingly:

  • A company can apply for short-time work if 10% of its employees are affected by a loss of working hours. Previously, at least one-third of the employees had to be affected.
  • In the event of short-time work, social security contributions are fully reimbursed by the Federal Employment Agency.
  • Short-time allowance is also possible for employees in temporary employment (Zeitarbeit).
  • Normally, the payment of short-time work compensation is also limited to 12 months – now it can be extended to 24 months.

The Employment Agency pays the short-time work allowance as partial compensation for the wages lost due to a temporary absence from work. This relieves the employer of the costs of employing the employees. In this way, companies can continue to employ their employees even if there is a loss of orders. The short-time work allowance therefore helps to avoid dismissals. The short-time work allowance is calculated based on the net loss of wages. The short-time workers generally receive 60% of the lost flat-rate net wage. If there is at least one child living in the household, the short-time work allowance is 67% of the lost flat-rate net wage.[115] There are a number of general conditions which must be met to be able to receive short-time work benefits. Short-time work allowance can generally be granted if a reduction in working hours in the company has been agreed between the employer and employee representatives or between the employer and the employees concerned and this is accompanied by a significant loss of work and loss of earnings. The following conditions must be met:

       The loss of work is due to economic reasons (e.g. missing orders, shortage of raw materials) or an inevitable event (e.g. flood, official order, corona crisis).

       The loss of work is inevitable and the company has done everything to reduce or remedy it (e.g. use of working time credit within certain limits).

       The absence from work is temporary. This means that the transition to regular working hours can generally be expected again within the reference period.

       The employment agency was notified of the loss of work.

       After the loss of work begins, the employee continues an employment subject to compulsory insurance and there is no dismissal.

       The loss of work is considerable. This means that at least a third (limited until December 31, 2021: only 10%) of the employees in the company are affected by a loss of earnings of more than ten percent of their gross monthly earnings.

In the case of the corona virus, for example, this can be the case if deliveries are missing (economic reasons) and working hours are reduced as a result. But also state protective measures (for example, orders from the health department are an inevitable event) can ensure that the company is temporarily closed and this results in a loss of pay for the employees.[116]

There are some simplifications regarding the regulations for short-time work allowances during times of crisis. For instance, the relief for short-time work benefits is issued by the federal government by ordinance. They are valid until December 31, 2021.[117] The requirements for access to short-time work are made easier and employers are relieved of the burden of paying social security contributions.

As a specification, the following information must be provided in detail:

       A company can already register short-time work if at least ten percent of the employees in the company are affected by a loss of work. So far, this threshold has been a third of the workforce.

       There is no need to build up negative working time balances before paying the short-time allowance. Previously applicable law requires that in companies in which agreements on working time fluctuations are used, these are also used to avoid short-time working.

       Temporary workers can also receive short-time allowance.

       The Federal Employment Agency will fully reimburse the social security contributions that employers have to pay for their short-time employees .

       For recipients of seasonal short-time working allowance, the social security contributions are not reimbursed from the winter employment surcharge, but also from contribution funds.

       The short-time work allowance increases to 70 percent from the fourth month onwards (employees with at least one child: 77 percent). From the 7th month onwards, it increases again to 80 percent (employees with at least one child: 87 percent).

1.9.11 Documents Required to Process Short-time Work Allowance

In addition, the following documents are required (from the employer):

       Notification of absence from work (the notification can be submitted quickly, securely and at any time via online portal if one has the relevant online access).

       Reason for the absence from work

       Business registration

       Agreement with the works council or the declaration of consent of the employees who are employed on short-time work

Time taken to process the information on short-time work

So far, most of the advertisements for short-time allowance are processed within 15 days.[118] However, due to the currently increased workload, this processing time will be difficult to maintain. The employees in the processing points do everything to process the documents as quickly as possible with less bureaucracy and to give positive feedback.

After submitting the notification, the employer receives a fundamental decision from the employment agency. If this is complied with, the employer can calculate the loss. The employer calculates the remuneration for the hours worked and the loss of hours not worked.[119] With a request for benefits and the accounting lists, the absences and remuneration of all affected employees must be submitted to the responsible employment agency within three months. The specific claims will be calculated and transferred retrospectively. That means: the employer first pays the money to his employees and receives it afterwards from the federal agency. The operational services of the employment agencies take their job very seriously. The staff members do everything in their power to process the application quickly and with minimum bureaucracy as possible.

1.9.12 Proof of Economic Reasons for Reporting Short-time Work.

The reasons for the loss of work are explained in detail in the form for reporting the loss of work to the local employment agency. The form contains a declaration from the employer that the information was given to the best of its knowledge. If there is a works council, it must agree to the information provided by the employer or submit a separate statement.[120]

1.9.13 People Entitled to Short-time Allowance.

All employees who have not been given notice who have lost wages of over 10% due to short-time work and who continue to be employed subject to compulsory insurance are entitled to short-time work allowance. If the so-called materiality threshold is reached (at least 1/3 of the workforce has a loss of work of more than 10%), employees who are not given notice and who are subject to compulsory insurance and whose salary loss is 10% or less can also receive short-time allowance. For a limited period until December 31, 2021, the materiality threshold has been reduced from one third to ten percent of the workforce.[121]

1.9.14 How Quickly can Short-time Work be Introduced

Short-time work can be introduced at very short notice through corresponding agreements to reduce working hours in the company in the event of missed orders and reported to the local employment agency. The employer calculates the short-time work allowance and pays it to the employees. A reimbursement application is then submitted to the local employment agency, which, after checking the application documents, immediately reimburses the employer for the short-time work allowance.[122] Open questions can be clarified quickly and with minimum bureaucracy with the local employment agency. Working hours do not have to be reduced equally for all employees. It is important that the reduction of working hours with reduced pay, i.e. short-time work, is effectively agreed for all employees concerned on the basis of collective agreements, works agreements or individual contractual provisions. The prerequisites for the payment of short-time working allowance are met, among other things, if at least one third or, for a limited period until December 31, 2021, ten percent of the employees in the company are affected by a loss of more than ten percent of their gross monthly pay. Short-time working does not have to be introduced and reported for the entire company. Short-time work can also be limited to individual company departments. Whether the loss of work lasts for hours, days or even weeks depends on the order situation and the agreements in the company. In the case of “short-time work zero”, the loss of work is 100%, which means that work is completely suspended for a temporary period.[123]

 

2. Outdoor Activity Hiking

2.1 Hiking during the COVID-19 Crisis

During the corona pandemic, hiking not only experienced a strong boom in Germany’s population. There has also been more hiking in the Netherlands since the beginning of the pandemic. This improves health, but it also has disadvantages, for example in the form of more rubbish. Due to the corona pandemic, the event organized jointly by the German Hiking Association (DWV) and the German National Tourist Board (DZT) did not take place as a face-to-face event during the ITB, as usual, but virtually with around 400 participants (Kuhr, 2021). Two DWV surveys in the summer and autumn of last year showed that the demand for hiking trails increased sharply in 2020 compared to 2019 due to the corona pandemic: 92% of those surveyed registered a very high or high frequency of footfall on hiking trails in 2020. The DWV also asked about conflicts between hikers and other users of hiking trails as well as environmental damage. 53% of the respondents saw increased environmental damage such as more rubbish and higher traffic volume due to the increased use of the hiking trails. The majority of respondents (56%) observed more usage conflicts. Michaela Klare from the GNTB reported during the forum that hiking is becoming increasingly popular in the Netherlands. “On holiday in Germany for Dutch people, hiking is the most popular activity with 53 percent, well before cycling.” In 2020, holiday activities would have focused even more on nature. A changed age structure, increasing health awareness and the need for balance in nature will continue to support the hiking trend in the future (Kuhr, 2021).

2.2 Hiking Tourism

Hiking tourism is the category of tourism that generates its revenue from the income from hikers. According to the German Hiking Association, regular hikers are also referred to as intensive hikers. Intensive hikers are vacationers who go on sports and active vacations, in which hiking is the main activity of the trip. Walking holidays are the fourth most popular type of holiday among Germans and around ten percent of Germans stated in a survey by IfD Allensbach that they often go hiking in their free time.[124] In particular, members of the hiking association go hiking regularly, i.e. several times a month. Over half of German hiking tourists are between 40 and 59 old. Most people say that the motive and intentions for hiking is to satisfy the desire for natural experience and physical activity. The landscape and nature are also the most important criteria for around 85% of hiking tourists when choosing a hiking region. When choosing the hiking trails, the length of the trail and the equipment with signs and signposts are particularly important. A total of around 550 hiking trails in Germany have, among other things, a good wayfinding system and have been awarded the German hiking seal for this excellence. But in addition to signposts and hiking maps, more and more digital media and information sources are finding their way into hiking tourism. Almost 40% of German hikers use apps or the internet during the hike to navigate on the go, to determine their location or to find out about the weather or overnight accommodation. For the majority of German hikers, the duration of a hike is between two and six hours per hike. Around 18% of hikers from Germany go hiking alone, but with a share of more than 40%, the majority hikes together with another person. The most popular landform is the low mountain range, followed by the high mountain range and the Alpine foothills. However, around 7% of German hikers also like to hike in flat terrain or in coastal regions. Given its proximity to the Alps, it is not surprising that Bavaria is the state with the most people who enjoy hiking in their free time. In particular, married people who do not have children who are below 14 years old in their households like to go hiking.[125]

2.2.1 Statistics for Hiking Tourism

The statistics show survey results on the sources of inspiration used by hikers in Germany in 2017. Around 42% of those surveyed found the region or the hiking trail of their last hike through the Internet, of which around 70% were on the website of the corresponding region/trail. In 2020, around 1.83 million people between the ages of 14 and 19 hiked frequently or occasionally.[126] Overall, around 38.84 million people in the German-speaking population aged 14 and over went hiking frequently or occasionally in their free time. In 2020, around 19.18 million men in Germany went hiking frequently or occasionally, which corresponds to around 55% of the male German-speaking population aged 14 and over. In 2020 there were around 0.55 million people in the German-speaking population aged 14 and over who hiked several times a week.[127]  In 2021 there were around 17.27 million people in the German-speaking population aged 14 and over who would prefer a hiking or backpacking holiday. In a 2019 survey on sports on vacation, 49% of respondents in Germany who can imagine booking an active vacation said that they would be interested in a hiking vacation. Around 12% of those surveyed are interested in a rider camp. The statistics show the number of overnight stays by hikers in Germany on a multi-day hike in 2018. Around 30% of those surveyed who undertook a multi-day hike stayed for one to three nights.

 

 

 

 

 

 

3.1 Research Question

In the context of this paper, the following questions will be answered:

 

  • Did people who were or are on short-time work engage in more hiking activities than before?
  • Did people who were or are on short time hiked more during that very time?
  • Have people who were or are on short-time work hiked because of the increased leisure time they have as a result?
  • How has short-time work affected the hiking leisure industry?

 

 

3.2 Structure of the work

First of all, basic terms related to the topic will be explained and defined.

Subsequently, chapter 3 explains the approach of the methodology used for this thesis. Finally, chapter 4 draws a conclusion and gives a short outlook.

 

 

2.4.1   Lockdown

“The slower the coronavirus spreads, the better our healthcare system can cope with it. The fewer people who are infected at the same time, the better doctors can treat seriously ill patients” (www.bundesgesundheitsministerium.de), with these drastic words Health Minister Jens Spahn addressed the population on 11 March 2020.

In order to contain the coronavirus, the borders of the Federal Republic of Germany to neighbouring countries were initially closed five days later on 16 March 2020 and holiday travel to Germany and abroad was prohibited.

At the same time, the federal government ordered the closure of shops and public facilities, as well as leisure and sports facilities. Exceptions were shops that sold food and daily necessities, such as supermarkets, pharmacies or drugstores. Furthermore, banks, post offices and laundromats were also open (www.tagesschau.de).

On March 22, 2020, “the federal and provincial governments relied on a comprehensive no-contact rule” (www.tagesschau.de) that prohibited contacts by more than two people in public.

This “shutdown” of public life hit culture, sport and the economy particularly hard in almost all sectors. Companies had to send their employees to the “home office” or, as already described in chapter 2.1, to short-time work. For this reason, 470,000 companies had already registered for short-time work by 31 March 2020 (www.tagesschau.de).

2.4.2 Definition of Short-time work

Short-time work – also called short-time compensation – is a subsidy for temporary reductions in the number of hours worked in firms affected by temporary shocks. Short-time work programmes allow employers who experience temporary drops in demand or production to reduce their employees’ hours instead of laying them off. Employees receive from the government a subsidy proportional to the reduction in hours. Hoarding labour in the firm during a temporary negative shock enables the firm to keep specific human capital within the firm and avoid the costly processes of separation and then of re-hiring and training when economic conditions improve. For workers, it preserves experience and specific human capital and avoids the often very long-term career costs of layoffs.[128]

Without short-time work subsidies, labour hoarding may be suboptimally low during temporary shocks because of commitment issues and/or difficulties to move resources across time. Liquidity constraints, for instance, prevent firms from insuring workers and will generate inefficiently high separations. Well-designed and targeted short-time work schemes can therefore be an effective tool to save jobs and businesses and to accelerate economic recovery. The sharp contraction caused by the public-health response to COVID-19 is a textbook case for the use of short-time work: it combines a mandated reduction in hours of work in many sectors due to confinement measures and a massive liquidity crunch for firms. In this context, short-time work can be much more effective than other forms of insurance such as unemployment insurance or universal transfers, and more efficient than other forms of wage subsidies.[129]

As a result, short-time work schemes are now at the heart of the policy response enacted by various countries. Those with well-established short-time work programmes, such as France, Italy, Germany, and Belgium, have seen massive increases in uptake, compared with even the Great Recession.[130] For example:

  • Estimates for Germany indicate that 2.35 million employees (almost 6% of total employment) will receive Kurzarbeit during the COVID-19 crisis, compared to 1.4 million at the peak of the Great Recession. Considering that Kurzarbeit cost approximately €5 billion in 2009 (Boeri and Bruecker 2011), we would expect spending on short-time work to climb to €8.4 billion today.
  • In France, 730,000 employees (2.8%) are currently being paid by the French short-time work scheme. In contrast, 227,000 employees were on short-time work at the height of short-time work utilisation in 2009.
  • In Belgium, 100,000 people were on short-time work at the peak of the Great Recession, while nowadays over 1 million are (22%).
  • In the US, 26 states already have short-time work schemes in place. The availability of the schemes should be advertised more and their scope extended to all states.

Still very little is known about the effectiveness of short-time work. It has been used before, especially during the Great Recession, but in a limited set of countries. When the variation and eligibility rules across firms is exploited, it is found that short-time work has large positive effects on employment: firms receiving the subsidy experience a 40% reduction in hours worked per employee, and an equivalent increase in employment headcount.[131] Evidence from the French and Swiss cases documents the positive effects on employment and on firm survival.[132] Several studies have shown that short-time work has strong effects on liquidity-constrained firms that face a temporary demand or productivity shocks.[133] The programme enables these firms to engage in labour hoarding and recover more quickly after the shock, with positive medium-run effects on their workers. This is precisely the type of situation we are facing, which makes short-time work especially desirable.

One may worry that, by subsidising the preservation of existing matches, short-time work may prevent workers to move from low- to high-productivity firms during recessions. In this way, the policy may have significant negative reallocation effects in the labour market. In our paper, leveraging rich spatial variation in treatment intensity across more than 600 local labour markets in Italy, we estimate how an increase in the fraction of workers receiving the subsidy affects employment outcomes in non-treated firms. Studies have shown that despite short-time work having targeted predominantly low-productivity firms, reallocation effects are small. While such small reallocation effects were estimated among a much smaller number of workers than are involved today, we note that the current downturn is inherently a response to a public-health crisis and not an example of a market-led recession that is typically thought to generate ‘creative-destruction’ forces.[134]

 

The following chapter is devoted to the approach of the methodology used in this thesis.

 

 

2.   Online survey

To answer the questions required on this topic, an online questionnaire (see Appendix I) was created with the help of the program “google forms”. The advantage of this program was that the questionnaire could be quickly sent to the participants by means of a link https://docs.google.com/forms/d/1YR-l6gEBJnLKqeR3DwLrts8OUmzS0t14uD5AS4YJTB4/edit?usp=sharing.

 

could be sent to the test persons. Furthermore, the program automatically evaluated the answers and displayed these results in diagrams.

 

2.1   Data collection procedure

First, a pre-test was carried out on ten test persons to find out whether the questions were understood and whether it was possible to work on the topic. The above link was sent to this test group via WhatsApp. Since the pretest did not present any problems, the test was sent via WhatsApp or e-mail with the request to complete and return it within the next 14 days.

 

2.2   Questionnaire

The title of the survey was the topic of the present paper ” The Influence of the Labor Market Instrument Short-Time Work on the Outdoor Sports Segment Hiking in the Corona Crisis”. The survey used multiple-choice questions. The survey questions are numbered from 1 to 11. For questions 1 to 8, the interviewee is required to choose one answer from a number of preset choices. For question number 9, the interviewee has the option of selecting several answers from a pool of various possiblities. The questionnaire was divided into three systematic sections. At the beginning of the first section of the questionnaire (see Appendix I), simple socio-demographic questions were asked about gender and age. The age group was limited from 15 years onwards; according to the ILO definition, persons are only considered to be in employment from this age onwards.

The subsequent question as to whether the respondents had been on short-time working or not was also asked as a multiple-choice question. As an answer option, one could specify either “Yes” or “No”. If this question was answered with “No”, the questionnaire was automatically closed for these persons, as only people in short-time work were relevant for this survey.

The second section of the survey began with the question about the length of short-time work, although here too only one answer option could be given.

The following questions five and six related to the frequency of outdoor activities that were pursued before and during the period of short-time work. Here, too, only one answer option was possible in each case, with the alternative answers “Never” (for question five) and “Don’t know” also possible for these questions.

 

 

(at question six) were given in order not to pressure the respondents into an answer that might (possibly) not have been truthful. Through these two questions, it was possible to find out whether the persons engaged in more outdoor activities during the time in short-time work than before.

Questions seven and eight were designed to find out whether the persons had already regularly bought outdoor articles before the period of short-time working and whether they had bought any during the period of short-time working. Again, the alternative answers “Don’t know” were given in case the subjects did not remember. If the answer to question eight was “No”, the survey was automatically ended for these respondents, as the aim was to investigate the influence of short-time working on the outdoor industry, i.e. the purchase of outdoor articles. Question nine asked more specifically about the outdoor articles purchased, and here too there were several possible answers. There were many outdoor article segments with examples to choose from in this question. The alternative answer “Other” could be used if another out- door item from another segment that was not mentioned as an answer was purchased. Finally, question ten was designed to determine whether the reason for purchasing outdoor items was increased leisure time in short-time work. At the end of the survey, the question about the future purchase of outdoor articles was asked, which made it possible to give an outlook.

 

 

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