Short-time allowances in times of crisis: A survey experiment

Stephan, Gesine; Dütsch, Matthias; Osiander, Christopher Article Short-time allowances in times of crisis: A survey experiment Journal for Labour Market Research Provided in Cooperation with: Institute for Employment Research (IAB) Suggested Citation: Stephan, Gesine; Dütsch, Matthias; Osiander, Christopher (2023) : Short-time allowances in times of crisis: A survey experiment, Journal for Labour Market Research, ISSN 2510-5027, Springer, Heidelberg, Vol. 57, Iss. 1, pp. 1-19, https://doi.org/10.1186/s12651-023-00358-3 This Version is available at: https://hdl.handle.net/10419/289757 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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Journal for Labour Market Research Short-time allowances intimesof crisis: asurvey experiment Gesine Stephan1,4* , Matthias Dütsch2,3 and Christopher Osiander1 Abstract During the COVID-19 pandemic, many countries used short-time work schemes, i.e., subsidies for temporary working hours reductions due to production drops. In Germany, regulations on entitlements and benefits have been much more generous during the pandemic than they were in noncrisis times. This paper conducts a factorial survey experiment among the workforce to investigate which amounts of short-time benefits and which associated replacement rates were perceived as appropriate during the pandemic. We interpret our findings in the context of the deservingness theory. Our results show that the assessments are partly consistent with the legal design features in Germany. One of our key findings is that, according to respondents, the short-time allowance should decrease slightly with an increasing duration of short-time work. In Germany, however, with the onset of the pandemic, a rule was temporarily implemented that step-wise increased short-time work benefits with the duration of short-time work. Keywords Short-time work, Short-time allowance, COVID-19, Deservingness theory, Factorial survey JEL Classification J38, J68 1 Introduction The COVID-19 pandemic has had a major impact on economic activity and labor markets worldwide. In the face of a demand shock, short-time work offers companies an alternative to layoffs in times of economic crises. These job retention schemes entail public income support by covering part of the salary for workers who must temporarily reduce their working hours or stop working altogether, while their employment contract continues. Short-time work benefits can be funded either by the unemployment insurance (and state support for the insurance) or from tax revenues (Konle-Seidl 2020). Generally, the economic aim of short-time work benefits is to secure employment, support firms affected by economic downturns, mitigate the social consequences of the crises and support domestic demand. Indeed, aggregate figures point to an inverse relationship between increases in short-time work and unemployment (Eichhorst etal. 2020). Since the outbreak of the pandemic, many countries in the Organisation for Economic Co-operation and Development (OECD) have extended such schemes and simplified their access requirements (Konle-Seidl 2020; OECD 2020). In a recent study gathering available evidence for Europe, Giupponi etal. (2022) conclude from an economic perspective that policy-makers probably did the right thing when resorting to an extensive use of short-time work schemes during the pandemic because *Correspondence: Gesine Stephan [email protected] 1 Institute for Employment Research (IAB), Nuremberg, Germany 2 Federal Institute for Occupational Safety and Health, Berlin, Germany 3 University of Bamberg, Bamberg, Germany 4 Friedrich-Alexander-Universität Erlangen-Nürnberg (FAU), Nuremberg, Germany 32 Page 2 of 19 G.Stephan et al. this social policy instrument mitigates the social costs created by large-scale layoffs.1 Welfare state institutions—such as short-time work regulations and the unemployment insurance system— affect not only benefit recipients but also the broad number of citizens who contribute to the system. For the legitimacy of the welfare state, it is thus important that citizens accept and support the measures and regulations decided at the political level (Liebig and Sauer 2016; Sachweh 2016; van Oorschot 2000). A number of studies have investigated justice perceptions regarding the amount of welfare benefits (e.g., Buss 2019; Castillo etal. 2019; Hörstermann and Andreß 2015) or the length of unemployment benefits (e.g., Osiander etal. 2022; Senghaas etal. 2023). However, the level of short-time benefits or sectoral and regional accumulations in the use of the instrument can also have a strong distributional impact. In this context, important questions concern the level of the short-time allowance that is assessed as appropriate and the ideas of deservingness that underlie these assessments. We analyze these questions based on a survey experiment, conducting a factorial survey among individuals randomly drawn from the German labor force. Our analysis thus provides the first results on the justice perceptions of the short-time allowance and the design features of this specific welfare state institution. We are particularly interested in the assessment of the specific regulations that were introduced ad hoc at the onset of the pandemic, e.g., a lower minimum labor shortage among the applying firms, an increase in the allowance amount with the duration of the short-time work, and extended opportunities to earn additional income during benefit receipt. In the following, Sect.2 presents information on the use and design of the short-time work allowance in Germany during the pandemic. Sections 3 describes the applied method, Sect.4 discusses the theoretical background, and Sect.5 introduces the data. Section6 presents the results of the empirical analysis, and Sect.7 concludes. 2 Short‑time work inGermany duringthepandemic The German labor market has come through the COVID-19 pandemic surprisingly robustly. The fact that unemployment has not increased substantially is due to the massive use of short-time work: During the COVID- 19 pandemic, at the peak of its use, one in five employees in Germany was working short-time (Statistics of the Federal Employment Agency 2020). Working hours substantially declined due to short-time work (Herzog-Stein et al. 2022). For May 2020 and based on survey data, Kruppe and Osiander (2020) found that nearly a quarter of those on short-time work were entirely on leave. In Germany, companies with employees who are subject to social insurance contributions can register for short-time work at the Federal Employment Agency if the firm experiences a significant temporary drop in working hours due to economic reasons or an “unavoidable” event and if certain conditions are met. The amount of the short-time allowance paid by the unemployment insurance is then based on the amount of the net income lost. With a view to other European countries, the design of short-time allowances ranges from absolute lower limits for the receipt of short-time allowances to a higher percentage of income replacement for low-income earners (Konle-Seidl 2020; Müller and Schulten 2020; Müller etal. 2022). Short-time work was already an important labor market policy instrument in Germany during the 2008/2009 financial crisis (e.g., Brenke et al. 2013, Gehrke and Weber 2020). At the peak of the financial crisis in May 2009, 5 percent of employees were working short-time. Regarding previous crises, the results on the efficacy of the German short-time work scheme are mixed. Balleer etal. (2016), Boeri etal. (2011) and Niedermayer and Tilly (2016) found positive effects of short-time work on employment. With regard to firms, Kopp and Siegenthaler (2021) pointed to the fact that short-time work increases the chance of survival for establishments and prevents the dismissal of workers at a low cost. In contrast, Bellmann and Gerner (2011) and Bellmann etal. (2015) established no effects on employment, and Calavrezo etal. (2010) and Kruppe and Scholz (2014) state even negative effects. Due to the COVID-19 pandemic, from March 1, 2020, new regulations were temporarily implemented in Germany that simplified the use of the short-time allowance for companies and provided support that was more generous. Table1 provides an overview on the design of important regulations in pre-pandemic times and on changes in regulations that were enacted during the pandemic. In normal times—i.e., absent specific regulations during the COVID-19 pandemic—at least one-third of the employees must be affected, and a working time reduction is also considered “avoidable” if it can be absorbed by reductions in working time accounts. Since March 2020, companies can report short-time work if at least 10 percent of employees have a loss of pay of more than 10 percent. The build-up of negative working time balances prior to the payment of the short-time allowance 1 However, short-time allowances, like many other public benefits, can involve some extent of free-riding (Bossler etal. 2023). Page 3 of 19 32 Short‑time allowances intimesof crisis: asurvey experiment was completely waived. Furthermore, in normal times, companies can receive short-time compensation for up to 12months for employees who are subject to social insurance contributions. During the pandemic, subject to certain conditions the maximum period of entitlement to the short-time allowance was increased to up to 28months. The amount of the short-time allowance in normal times is essentially the same as the amount of the unemployment benefit from the unemployment insurance system: The Federal Employment Agency reimburses companies 60 percent of net wages for employees without children and 67 percent for employees with at least one child, up to the unemployment insurance threshold. Regulations became more generous during the pandemic: If employees have to reduce their working hours by at least 50 percent, the short-time allowance for persons without children increased from 60 to 70 percent of the lost net wage from the fourth month on and to 80 percent from the seventh month on. Employees with children received 67 percent, followed by 77 percent and 87 percent of the lost net wages.2 In pre-pandemic times, earnings from a secondary or side job in place before the short-time work started were not offset against the short-time allowance. Earnings from secondary jobs taken up during short-time work, however, were deducted from the short-time allowance. This also became more generous during the pandemic: From May 1, 2020, until the end of 2020, income from side jobs taken up during short-time work did not reduce an employee’s short-time allowance provided that the sum of the short-time allowance and the secondary job did not exceed the previous monthly net income. Afterwards, the earnings from a secondary job with marginal employment have not been deducted from the short-time allowance at all.3 In our empirical investigation, we aim to assess in particular how several of these, rather ad hoc, newly introduced design features for the receipt of the short-time work allowance are perceived. 3 Method To empirically analyze the perceived appropriate amount of the short-time allowance, we conducted a factorial survey experiment (see, e.g., Auspurg and Hinz 2015) included in an online survey. The theoretical considerations underlying the design of the experiment are outlined in Sect.4. The survey participants were each provided with four scenarios (“vignettes”) describing different situations, for which they were asked to indicate how high they thought the short-time allowance should be. These vignettes varied along a series of dimensions (describing the affected employees and the company) that could take on different levels. These levels were randomly varied as in an experiment. In this way, the causal effect of employee and company characteristics on respondents’ assessments can be analyzed. The key advantage of this method is that the respondents are not asked for their assessment Table 1 Important institutional regulations for short-time work in Germany Pre-pandemic regulations Regulations (at least partly) during the pandemic General condition Significant temporary drop in working hours due to economic reasons or “unavoidable” event Affected share of workforce At least 1/3 At least 1/10 Use of working time accounts Required Waived Maximum duration Up to 12 months Up to 28 months Net wage replacement rate without (with) children 60 (67) percent Month 1–3: 60 (67) percent Month 4–6: 70 (77) percent Since month 7: 80 (87) percent Offsetting income from secondary employment Continued job: No Continued job: No New job: Yes New job: Threshold 2 Of course, employers can supplement the short-time allowance to compensate for employees’ losses, and collective bargaining agreements or company-specific agreements sometimes contain provisions on supplemental payments. 3 At the time of the survey, marginally employed persons were allowed to earn up to 450 euros gross per month. Since October 2022, the threshold for marginal employment has been increased to 520 euros. Additionally, some further changes were temporarily enacted: Marginally employed persons (with a monthly income of 450 euros or less), are generally not eligible to participate in the short-time scheme. During normal times, the same applies to employees whose employment relationship has already been terminated or who are receiving sick pay or who are in temporary agency work. During the pandemic, however, temporary agency workers have also been able to receive short-time allowances. Finally, during the pandemic the Federal Employment Agency reimbursed firms for the social security contributions for lost working hours (until the end of December 2021, to 100 percent; until the end of March 2022, to 50 percent), which is not the case in normal times. 32 Page 4 of 19 G.Stephan et al. by means of single—often relatively abstract—items but based on a specific, easily comprehensible situation about which the respondents should assess several aspects simultaneously. The survey participants were first given some elementary information on the short-time allowance, such as that the Federal Employment Agency reimburses companies for part of their wage costs and that the federal government has eased the conditions for receiving the short-time allowance in response to the economic crisis (see Appendix A). Some of the respondents were then randomly assigned to receive information on the amount of the short-time allowance and its increase during the COVID-19 pandemic from the fourth month of receipt. In this way, it is possible to examine the extent to which information on the current legal situation serves as an “anchor” upon which the respondents might base their assessments. The introductory information was followed by the vignettes. The vignette universe—consisting of all possible combinations of levels—contained 384 possible different scenarios. The vignette design is an improved and adapted follow up on a small-scale pre-study (Stephan etal. 2021), which was published as a German-language policy report. We use the entire range of level combinations as none of these were illogical or unrealistic. As mentioned above, the respondents each assessed four scenarios (see Table 2) that were randomly drawn from the vignette universe. An example scenario follows (see the Appendix A for the original German version), with the bolded text varying and being visually highlighted for the respondents: “A company sends 10 percent of the workforce on short-time work due to the COVID-19 crisis. A single, full-time male employee of the company normally earns 2000 euros net per month. He has high, fixed monthly expenses (including for his apartment). The company registers him for short-time work with the Federal Employment Agency and releases him completely from work. He receives the short-time allowance. As a result of the short-time work, he takes on a part-time job in which he earns an additional 200 euros net per month.” How much do you think the short-time benefit from unemployment insurance should be for this employee? Table 2 Vignette dimensions, levels, and potential justice principles applied Dimension Levels Potential deservingness principles applied and related hypothesis Share of workforce affected by labor shortage • 10 percent • One third • 100 percent No hypothesis Employee gender • Male • Female Control (H1) Monthly net earnings • 1500 euros • 2000 euros • 2500 euros • 3000 euros Need (replacement rate, H2a) Reciprocity (absolute amount, H2b) Fixed costs (housing etc.) • Low • High Need (H3a) Attitude (H3b) Additional job or further training during short-time work • 200 euros from new additional job taken up because of short-time work • 500 euros from new additional job taken up because of short-time work • 1000 euros from new additional job taken up because of short-time work • 200 euros from continued additional job conducted before short-time work • 500 euros from continued additional job conducted before short-time work • 1000 euros from continued additional job conducted before short-time work • Full-time further training • Neither secondary job nor further training Need (additional income, H4a) Reciprocity (continued job, H4b) Attitude (further training, H4c) Answer category: Amount by duration of short-time pay • First to third month • Fourth to sixth month • From the seventh month Need (H5) Page 5 of 19 32 Short‑time allowances intimesof crisis: asurvey experiment In the first to the third month: __ __ __ __ euros per month In the fourth to the sixth month: __ __ __ __ euros per month From the seventh month: __ __ __ __ euros per month After each scenario, the respondents indicated how much they thought the monthly short-time unemployment insurance benefit should be for the person described (who was 100 percent exempt from work in each scenario). A maximum four-digit amount (in euros) could be entered for each of the first three months, for months four to six, and for the period from the seventh month onward, so each respondent could have up to twelve responses. Each respondent evaluated thus (up to) four vignettes and provided (up to) three assessments for each vignette. The multivariate analysis therefore must consider the hierarchical structure of the data. We cannot assume that a respondent’s assessments are independent of each other. First, focusing on the vignettes, we present the results from mixed models with random intercepts at the individual and vignette levels. Second, we extended the mixed model by controlling for a high number of additional individual characteristics, in particular for variables also relevant for survey participation. As a caveat, we would like to mention that a total release of work is not the standard case for employees working short-time, but easier for respondents to understand than partial reductions of working hours. However, with nearly a quarter of such cases in May 2020, the scenario is not exceptional. Furthermore, we cannot exclude that the chosen dimensions of the vignettes could potentially have an impact on the assessments. In particular, the mere mention of a side job may evoke the association that employees should look for such additional jobs. 4 Theoretical considerations In the run-up to the new regulations, the amount of short-time allowance was the subject of much controversy in politics and business. As public funding is a scarce good, this discussion raises questions of distributive justice (Austin and Walster 1975; Leventhal 1976; Jasso 1978). Different normative principles might shape the perceptions of the appropriate amount or wage replacement rate of short-time pay. As we are interested in the question if these amounts or replacement rates vary with characteristics of the recipient and the situation, we base our theoretical considerations on the deservingness theory (Reeskens and van Oorschot2013, Meulemanet al. 2020). Deservingness theory builds on the notion that benefit recipients, based on different principles, might be perceived as more or less deserving. It is rooted in classical principles of distributive justice, in particular equity (Adams 1965) and need. Furthermore, it encompasses further important heuristics that empirical studies have identified to be significant for justice assessments. The so-called CARIN model (van Oorschot 2000; van Oorschot etal. 2017; Meuleman et al. 2020, Reeskens and van der Meer2019) summarizes these as the principles of control, attitude, reciprocity, identity, and need: (1) Persons or groups who have more control over their situation have better chances of coping with the situation on their own or overcoming a difficult situation, and are thus perceived as less deserving (the reverse is true for groups with less perceived control). (2) Attitude displays the gratefulness and also compliance with the system; a “better” attitude makes individuals or groups more deserving of social benefits. (3) Reciprocity implies that those who contributed more to the system should receive greater benefits. “Contributions” can be financial (e.g. taxes, social security contributions) or intangible (e.g. volunteering). (4) Identity refers to a person’s group membership or perceived proximity to those assessing deservingness. (5) According to the need principle, groups with greater needs should receive more resources (e.g. people with a low income). In the following, we discuss the dimensions varied in our vignettes in the order they appear in the scenarios with respect to these principles. We do not formulate a hypothesis on the share of affected workers as this dimension is not directly related to the individual recipient. Gender is a central category with regard to economic inequalities; e.g., women are discriminated against in terms of wages (Blau and Kahn 2017). However, the control principle implies that neither the appropriate individual replacement rate nor benefit amount should—at least for singles—vary with the gender of the potential recipients (H1). When assessing the appropriate replacement rate for individuals with varying labor incomes, respondents might be guided by the need principle. As employees with lower incomes must often spend a higher share of their earnings on essential expenses as housing and nutrition, a higher replacement cost for them might be deemed appropriate (H2a). However, also the reciprocity principle might be considered when assessing the appropriate amount of short-time work benefits: Employees with higher incomes pay more in social security contributions in absolute terms, and higher contributions justify higher absolute amounts of short-time work benefits, reflecting the principle of reciprocity (H2b). Here the reciprocity principle could, but does not necessarily have to conflict with applying the need principle: Higher replacement rates for low-wage earners might be reconciled with higher absolute amounts for high-wage earners. 32 Page 6 of 19 G.Stephan et al. To individuals with a high share of fixed costs (e.g. for housing), the need principle might be applied, if these costs are considered as “unavoidable”. In this case, we might expect that respondents would grant such individuals more short-time pay (H3a). However, high fixed costs might also signal a luxury stile of living and thus show-off attitudes (H3b). In this case, the attitude principle might conflict with the need principle and we might expect less short-time pay for those individuals. Individuals with additional earnings from secondary jobs may be better able to compensate for their income losses. The need principle would thus imply that the perceived appropriate short-time pay might in general decrease with earnings from a side job (H4a). Secondary jobs held before the start of the short-time work, however, might be considered also from the viewpoint of the reciprocity principle. Individuals have contributed to the economy earlier through this side job (potentially also paying social benefits) and thus deserve a return for this (H4b). This would imply that suggested deductions might be smaller for continued side jobs. Furthermore, engaging in further full-time training during times of shorttime work with zero working hours could be interpreted as a positive attitude to use the free time during shorttime work in a productive way and thus justify higher net replacement rates (H4c). With respect to the duration of short-time work, people can bridge the first few months on short-time work with a lower income, e.g., by liquidating their savings. Doing so could become more difficult if short-time work lasts longer. In this way, the need principle could result in a higher wage replacement rate being considered appropriate as the duration of short-time work increases (H5). Finally, characteristics of the respondents might also have an impact on their assessments. The identity principle reflects that individuals perceive persons with similar features as themselves as more deserving. This fact might display a tendency toward homophily but can also result from self-interest. We thus presume that individuals who have or expect to have experience with short-time work are more generous in their assessments of the appropriate amount or replacement rate during short-time work (H6a). Furthermore, one could speculate that in particular individuals with a lower household income might prefer short-time work replacement rates to decline with increasing earnings (H6b). 5 Data The analyses are based on an online survey of individuals who were randomly drawn from a two-percent sample of the so-called Integrated Employment Biographies (IEB) of the Institute of Employment Research. The IEB contain information on all periods of employment subject to social security contributions, unemployment benefit receipt from the unemployment insurance system, means-tested basic income receipt from the tax system, unemployment, job search and participation in labor market programs. IEB V14.01.00–190927, available at the time of sampling, encompassed all the registered episodes in these states until the end of 2018. The sampling frame contained individuals living in Germany who were between 18 and 70years old at the time of the data collection and had at least one IEB term during 2018 (see Stephan etal. 2021 for details). It should be noted that it does not contain self-employed persons and civil servants. Both groups might have different views about short-time pay than individuals in dependent work or unemployment. During November 2, 2020, and December 17, 2020, the potential participants received either an email invitation (if an email address was available in the operative database of the Federal Employment Agency) or an invitation by a postal letter to participate in the survey. Half of the sample randomly received the vignettes described above about short-time work, the other half questions about the fair amount of in-work benefits while receiving meanstested unemployment benefits (Senghaas et al. 2022). Respondents were additionally asked for their consent 0.00 0.02 0.04 0.06 0.08 0.10 0.12 0.14 0 500 1000 1500 2000 2500 3000 Perceived appropriate short-term pay (euros) 0.00 0.02 0.04 0.06 0.08 0.10 0.12 0.14 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 Perceived appropriate replacement rate (share) Fig. 1 Distribution of the perceived appropriate amounts and replacement rates of short-time pay (shares). Source: Authors’ own calculations. 9,424 observations for 789 persons. 101 bins. Means: 1569 euros and share of 0.70 Page 7 of 19 32 Short‑time allowances intimesof crisis: asurvey experiment to record linkage, i.e., to merge their answers with the IEB data, which contain detailed information about the respondents’ labor market history. From a gross field sample of approximately 42,500 persons drawn from the register data, 30,000 of whom were contacted by email and 12,500 of whom were contacted by post, a final sample of 1120 completed questionnaires was obtained, and 75 percent agreed to merge their survey answers with the IEB information available for them.4 At a first glance, the response rate may be perceived as low. However, we contacted the respondents without prior notice, and many of the non-respondents would probably also not participate in other surveys. More importantly, this procedure has the great advantage that One third of staff 100% of staff Male High fixed costs 2,000 euros 2,500 euros 3,000 euros 200 euros new side job 500 euros new side job 1,000 euros new side job 200 euros continued side job 500 euros continued side job 1.000 euros continued side job Full-time traning Months 4-6 Since month 7 Labor shortage in firm Gender and fixed costs Monthly net earnings Sideline job or training Time-varying allowance -500 -250 0 2505007501000 Effect on perceived appropriate short time pay (euros) Without further covariates With further covariatess Fig. 2 Estimated effects of the vignette characteristics on the appropriate amount of the short-time allowance. Dependent variable: Perceived appropriate amount of the short-time allowance in euros. Mixed effects models with random intercept at the individual and vignette levels with vignette features only, confidence intervals at α = 0.05. Reference vignette features: Labor shortage 10 percent, female worker, low monthly fixed costs, monthly net earnings 1500 euros, neither secondary job nor training, allowance during months 1 to 3 of short-time work. Estimated constants: 1135 and 1194 Euros. Source: Authors’ own calculations. 9424 observations for 789 persons 4 Such consent for record linkage is necessary due to German data protection regulations. 32 Page 8 of 19 G.Stephan et al. it allows us to investigate in detail the selection into the survey participation and to control in the estimates for the factors driving this selection. These factors are usually unknown when working, e.g., with an online commercial panel. For instance, we found that participation probabilities were higher for persons with German nationality and increased with educational levels, the requirement levels of the latest job, years spent in employment and unemployment benefits (see Stephan etal 2021). We included such variables as the controls in our estimates. Nonetheless, non-respondents might still differ significantly from the respondents in terms of unobserved characteristics. One third of staff 100% of staff Male High fixed costs 2,000 euros 2,500 euros 3,000 euros 200 euros new side job 500 euros new side job 1,000 euros new side job 200 euros continued side job 500 euros continued side job 1.000 euros continued side job Full-time traning Months 4-6 Since month 7 Labor shortage in firm Gender and fixed costs Monthly net earnings Sideline job or training Time-varying allowance -0.2 -0.1 0.00.10.2 Effect on perceived appropriate replacement rate (share) Without further covariates With further covariates Fig. 3 Estimated effects of the vignette characteristics on the appropriate replacement rate of the short-time allowance. Dependent variable: Perceived appropriate replacement rate as a share. Mixed effects model with random intercept at the individual and vignette levels, vignette features only, confidence intervals at α = 0.05. Reference vignette features: Labor shortage 10 percent, female worker, low monthly fixed costs, monthly net earnings 1500 euros, neither secondary job nor training, allowance during months 1 to 3 of short-time work. Estimated constants: 0.76 and 0.79. Source: Authors’ own calculations. 9424 observations for 789 persons Page 15 of 19 32 Short‑time allowances intimesof crisis: asurvey experiment One third of staff 100% of staff Male High fixed costs 2,000 euros 2,500 euros 3,000 euros 200 euros new side job 500 euros new side job 1,000 euros new side job 200 euros continued side job 500 euros continued side job 1.000 euros continued side job Full-time traning Months 4-6 Since month 7 Labor shortage in firm Gender and fixed costs Monthly net earnings Sideline job or training Time-varying allowance -500 -250 0 2505007501000 Effect on perceived appropriate short time pay (euros) Househould income up to 3,999 euros Househould income at least 4,000 euros Fig. 6 Estimated effects of the vignette characteristics on the amount of the allowance by monthly household net income. Dependent variable: Perceived appropriate amount of the short-time allowance in euros. Mixed effects model with random intercept at the individual and vignette levels. Vignette features only, confidence intervals at α = 0.05.Reference vignette features: Labor shortage 10 percent, female worker, low monthly fixed costs, monthly net earnings 1500 euros, neither secondary job nor training, allowance during months 1 to 3 of short-time work. Source: Authors’ own calculations. 7741 observations for 2591 persons 32 Page 16 of 19 G.Stephan et al. One third of staff 100% of staff Male High fixed costs 2,000 euros 2,500 euros 3,000 euros 200 euros new side job 500 euros new side job 1,000 euros new side job 200 euros continued side job 500 euros continued side job 1.000 euros continued side job Full-time traning Months 4-6 Since month 7 Labor shortage in firm Gender and fixed costs Monthly net earnings Sideline job or training Time-varying allowance -0.2 -0.1 0.00.10.2 Effect on perceived appropriate replacement rate (share) Househould income up to 3,999 euros Househould income at least 4,000 euros Fig. 7 Estimated effects of the vignette characteristics on the replacement rate by (potential) experience by monthly household net income. Dependent variable: Perceived appropriate replacement rate as a share. Mixed effects model with random intercept at the individual and vignette levels, vignette features only, confidence intervals at α = 0.05. Reference vignette features: Labor shortage 10 percent, female worker, low monthly fixed costs, monthly net earnings 1500 euros, neither secondary job nor training, allowance during months 1 to 3 of short-time work. Source: Authors’ own calculations. 7741 observations for 2591 persons Page 17 of 19 32 Short‑time allowances intimesof crisis: asurvey experiment Table 3 Means and estimated coefficients of the anchoring information and the characteristics of the respondents Mean Amount Replacement rate (1) (2) (3) Anchoring information (reference: none) Yes 0.440 14.759 0.006 (0.496) (23.351) (0.010) Short-time work pay receipt (reference: No) During past, present, or expected 0.205 23.699 0.010 (0.404) (30.024) (0.013) Male 0.584 − 22.225 − 0.009 (0.493) (23.928) (0.010) Non-German nationality 0.049 47.438 0.019 (0.215) (56.129) (0.024) East Germany 0.167 35.589 0.014 (0.373) (31.492) (0.014) Age group (reference: up to 29) Age 30–39 0.275 73.063 0.028 (0.447) (43.490) (0.019) Age 40–49 0.204 − 81.180 − 0.038 (0.403) (46.910) (0.020) Age 50–59 0.238 7.395 − 0.000 (0.426) (45.423) (0.020) Age 60 and older 0.128 − 51.833 − 0.026 (0.335) (56.618) (0.024) Monthly household net income (reference: up to 2,999 euros) 3000 up to 3999 euros 0.228 − 69.983 − 0.029 (0.420) (37.026) (0.016) 4000 up to 4999 euros 0.206 − 30.936 − 0.013 (0.404) (38.691) (0.017) At least 5000 euros 0.169 31.304 0.012 (0.374) (41.455) (0.018) Information missing 0.179 − 22.379 − 0.016 (0.383) (43.384) (0.019) Education (reference: vocational degree) No vocational degree 0.027 − 266.745** − 0.114** (0.161) (78.646) (0.034) University degree 0.432 − 40.602 − 0.016 (0.495) (28.274) (0.012) Other degree 0.063 − 34.918 − 0.022 (0.244) (62.156) (0.027) Actual labor market state (reference: employed) Unemployed 0.071 − 33.953 − 0.016 (0.257) (48.607) (0.021) In school, studies, training 0.065 22.668 0.005 (0.246) (60.613) (0.026) Retired 0.058 30.158 0.016 (0.235) (62.580) (0.027) Other state 0.044 87.265 0.029 (0.205) (59.389) (0.026) Tasks in last job (professional activities) Helper activities 0.080 31.623 0.009 (0.272) (46.896) (0.020) Complex specialist activities 0.194 24.113 0.010 Table 3 (continued) Mean Amount Replacement rate (1) (2) (3) (0.396) (32.693) (0.014) Highly complex specialist 0.254 − 3.968 − 0.003 (0.436) (32.645) (0.014) Years in particular states during the period 2014–2020 Regular employment 4.548 − 5.953 − 0.003 (1.843) (9.257) (0.004) Marginal employment 0.591 − 2.427 0.000 (1.290) (9.874) (0.004) Unemployment benefits 0.191 18.956 0.007 (0.425) (29.622) (0.013) Welfare benefits 0.205 − 7.370 − 0.004 (0.921) (14.183) (0.006) Standard errors in parentheses.Columns (2) and (3): Mixed effects model with random intercept at the individual and vignette levels. Source: Authors’ own calculations. 9424 observations for 789 persons. *p < 0.05. **p < 0.01 32 Page 18 of 19 G.Stephan et al. Table 4 (continued) Standard errors in parentheses. Mixed effects models with random intercept at the individual and vignette levels. Further controls in Columns (2) and (4): See Table3. Source: Authors’ own calculations. 9424 observations for 789 persons. *p < 0.05 **p < 0.01 Table 4 Estimated effects of the vignette characteristic on the appropriate amount of short-time pay and the appropriate replacement rate Amount Replacement rate (1) (2) (3) (4) Share of staff affected by labor shortage (reference: 10%) One third 11.293 11.254 0.004 0.004 (11.819) (11.816) (0.005) (0.005) 100 percent 8.184 7.525 0.006 0.006 (11.937) (11.930) (0.005) (0.005) Gender and fixed costs (independent categories; reference: Female and low fixed costs) Male 3.511 2.848 − 0.001 − 0.001 (9.648) (9.646) (0.004) (0.004) High fixed costs 79.795** 79.347** 0.033** 0.032** (9.727) (9.719) (0.004) (0.004) Monthly net earnings (reference: 1,500 euros) 2.000 euros 317.950** 318.902** − 0.029** − 0.028** (13.876) (13.873) (0.006) (0.006) 2.500 euros 628.920** 629.295** − 0.047** − 0.047** (14.041) (14.025) (0.006) (0.006) 3.000 euros 905.734** 906.453** − 0.068** − 0.067** (13.431) (13.421) (0.006) (0.006) Additional side job or further training during short time work (reference: neither) 200 euros, new job − 12.200 − -12.437 − 0.006 − 0.006 (19.213) (19.205) (0.008) (0.008) 500 euros, new job − 75.944** − 76.802** − 0.039** − 0.039** (19.046) (19.036) (0.008) (0.008) 1000 euros, new job − 346.944** − 347.306** − 0.170** − 0.170** (18.167) (18.160) (0.008) (0.008) 200 euros, continued job − 4.932 − 6.877 − 0.006 − 0.007 (19.009) (19.008) (0.008) (0.008) 500 euros, continued job − 30.688 − 31.369 − 0.020* − 0.020* (19.493) (19.477) (0.008) (0.008) 1000 euros, continued job − 141.149** − 143.212** − 0.065** − 0.066** (19.502) (19.505) (0.008) (0.008) Further training 105.670** 104.001** 0.046** 0.046** (19.370) (19.365) (0.008) (0.008) Time-varying allowance (reference: months 1 to 3) Months 4–6 − 10.608* − 10.603* − 0.005* − 0.005* (4.604) (4.604) (0.002) (0.002) Since month 7 − 34.710** − 34.712** − 0.015** − 0.015** (4.606) (4.606) (0.002) (0.002) Further controls No Yes No Yes Constant 1134.758** 1193.968** 0.758** 0.790** (21.166) (66.097) (0.009) (0.029) R squared 0.601 0.601 0.239 0.239 AIC 131681 131684 − 14311 − 14306 ICC 0.811 0.803 0.807 0.799 Acknowledgements We are grateful to two anonymous referees for their helpful advice. Furthermore, we are grateful to the Support Network for Interdisciplinary Social Policy Research (FIS) and the German Federal Ministry of Labor and Social Affairs for funding the research project (Grant Number: 00.00117.19). We thank the Data and IT Management of IAB, in particular Lina-Jeanette Metzger, for support in conducting the survey, and Monika Senghaas and Olaf Struck for their cooperation throughout the project. Author contributions The cited authors contributed insights in all parts of the paper. All authors read and approved the final manuscript. Funding The project has been funded as an FIS project (Grant number: 00.00117.19) of the German Federal Ministry of Labor and Social Affairs. The German Federal Ministry of Labor and Social Affairs had no role in the design of the study and collection, analysis, and interpretation of data. Furthermore, it had no influence on the way and place of publication of the results. Availability of data and materials As the data underlying our analysis are not completely proprietary, access to the data is restricted. The data used contain sensitive information and are subject to confidentiality regulations. Obtaining access through the research data center of the Institute for Employment Research (IAB) requires a contract with IAB. We will support researchers interested in replicating the results with the required formalities to receive data access. Declarations Ethics approval and consent to participate Not applicable. Consent for publication Not applicable. Competing interests The authors declare that they have no competing interests. Received: 5 April 2023 Accepted: 19 November 2023 References Adams, J.S.: Inequity in social exchange. In: Berkowitz, L. (ed.) Advances in experimental social psychology, pp. 267–299. Elsevier, New York (1965) Auspurg, K., Hinz, T.: Factorial survey experiments. 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