Weather Sensitivity of Short-Time Work

This interactive dashboard explores how temperature shocks transmit to German labor markets through short-time work (Kurzarbeit), and reveals a critical moderating factor: local bank capital. For example, per each additional °C in summer, construction firms tend to reduce hours and increase short-time work claims. However: the strength of this effect varies across Germany’s counties depending on the capitalization of their local banks. Regions with well-capitalized banks exhibit a dampened temperature-to-labor relationship. These findings suggest that strong local financial institutions provide a risk-sharing buffer at the firm level, enabling firms to access liquidity through credit and to smoothen temporary weather shocks rather than sharing risk with their workers and the social security system by reducing hours and applying for short-time work. This dashboard lets you explore these effects across 11 economic sectors and 4 seasons. It shows these effects for all sectors where we find a significant weather sensitivity of short-time work both in summer and winter.