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Just one year after the subprime crisis, and despite being one of the most impacted countries in the world, Germany displayed the highest GDP growth rate among EU countries and maintained it at its level for two years. Combined with a surprisingly small variation in unemployment rates over this period, some press articles have nicknamed the impressive German economic recovery the "second German miracle". In this paper, I produce empirical evidence of the role played by short-time work in the "German miracle". By exploiting firm-level data, I show that short-time work programs should target firms facing huge financial constraints and difficult business conditions. To these conditions, short-time work programs can preserve employment during a crisis and allow a greater take-up afterward.
