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The German labor market has been surprisingly bulletproof during the economic downturn, outperforming the United States and already beginning to tick downward, falling to 8.5 percent in March from 8.7 percent a year earlier.

Two recent reports help explain why. The reports offer some lessons that could be applicable in the United States and other countries.

One big reason Germany has kept a lid on unemployment, already well known, is the widespread use of so-called short work — “Kurzarbeit” in German. The scheme allows companies to cut workers’ hours, with the government making up some of the lost wages.

During the first quarter of 2010, 22 percent of firms surveyed by the Ifo Institute, a Munich research organization, said they were using Kurzarbeit. Among manufacturers, 39 percent were taking advantage of it.

One reason Kurzarbeit is so popular with companies is that it allows them to hang on to skilled workers. Read more…