Corona Effects on the Labor Markets in Hamburg and Schleswig-Holstein

The author reveals that despite a shrinking economy in the Corona year 2020, Hamburg and Schleswig-Holstein were spared a major labor market crisis. During the pandemic, the decline in employment was moderate at less than 2 percent, and the increase in the unemployment rate was limited to 1 to 2 percentage points in Schleswig-Holstein and Hamburg. In both northern German states, the massive use of short-time work prevented major employment slumps. The analysis highlights that the losers of the Corona crisis were the marginally employed, who were not absorbed by the rescue net of short-time work and where the decline was not reflected in the unemployment statistics. Comparing sectors, the analysis shows that employment in the public sector, health and social services, construction and delivery services in particular increased in both federal states. By contrast, catering, accommodation and temporary employment services in particular, as well as a large number of providers of private services, had to cut back on employment. In catering and accommodation as well as in consumer-oriented services, this was associated with the reduction of a particularly large number of marginal employees. These sectors were also hardest hit by the infection control requirements imposed by the state governments, which temporarily banned or severely restricted business operations during the pandemic. In Hamburg and Schleswig-Holstein, on the other hand, human capital-intensive industries with a high proportion of highly qualified workers proved to be particularly resistant to the crisis, with employment not only being maintained but even further expanded despite the pandemic.