| Dear readers,
The world of work is undergoing a profound transformation: Economic uncertainties, the desire for a better work-life balance and changing expectations towards employers are shaping the everyday lives of many employees. Yet, how do crises, care responsibilities, and labour regulations affect income and equality of opportunity in concrete terms?
The new issue of ZEW Monthly shows how corporate crises affect salary structures, why mothers experience long-term income losses, and what role waiting days (“Karenztage”) play in the current debate on sick pay. The latest analyses from ZEW Mannheim sheds light on the causes and mechanisms and looks into the consequences for employees and firms.
We hope you enjoy the read.
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 | | | RESEARCH ON THE WORLD OF WORK |
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↗ PART-TIME SICK LEAVE AND BONUS PAYMENTS BETTER THAN SICK PAY CUTS OR WAITING DAYS
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| Germany has one of the highest sick leave rates worldwide due to the very generous provisions for sick pay. Some political and business representatives are therefore calling for a waiting day (“first sick day unpaid”) or a reduction of the minimum sick pay level as stipulated by German social security law to around 80 per cent of gross wages. However, such measures would be counterproductive. These are the findings of a study by ZEW researcher Nicolas Ziebarth, which was recently published in the 2025 Absence Rate Report issued by the AOK Research Institute (WidO).
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| More about the study
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↗ HOW COMPANY CRISES CAUSE CHAIN REACTIONS IN WAGE STRUCTURES
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| When a company is hit by an economic shock, employees close to the minimum wage floors are more likely to be laid off than higher-paid employees. The latter, instead, are more likely to have part of their wage cut. In a study based on data from the metal industry, which was recently published in the renowned Journal of Labor Economics, ZEW economist Effrosyni Adamopoulou and co-authohrs show that the two phenomena are linked. In light of the current economic situation in the German metal industry, the findings are particularly relevant for managers and political decision-makers.
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| More about the study
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↗ EARNINGS LOSSES AFTER BIRTH OF FIRST CHILD FAR HIGHER THAN PREVIOUSLY THOUGHT
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| Women in Germany incur a much higher loss of earnings after the birth of their first child than previously estimated. In the fourth year after childbirth, they earn on average nearly 30,000 euros less than women of the same age without children – with long-term effects on their career and future pension income. Previous estimates were around 20,000 euros, which is about 30 per cent too low. These are the findings of a study conducted by ZEW researcher Lukas Riedel.
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| More about the study
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| | ↗ DIGITAL SOVEREIGNTY: COMPANIES REPORT DEPENDENCE ON AI AND SOFTWARE
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| A large share of companies in Germany perceive themselves as being highly reliant on non-European providers or partners in key technology fields. This is the finding of a representative ZEW survey conducted among approximately 1,100 companies in September 2025. Businesses in particular mention a strong dependency in the areas of software and generative artificial intelligence (AI) – even more so than in 2024 and 2021. Large companies are especially affected.
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↗ PART OF INDUSTRIAL BASE LOST DUE TO ENERGY CRISIS
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| In the spring of 2025, energy-intensive industrial production was almost 20 per cent below the 2022 level. This potentially permanent loss of production affects jobs with well above-average value creation. This is the diagnosis by ZEW economist Friedrich Heinemann. On behalf of the Foundation for Family Businesses, he has examined for the second time the energy prices and import risks of the 21 countries that are also compared in the Country Index for Family Businesses.
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↗ “THE PARIS AGREEMENT WAS AMBITIOUS FROM THE OUTSET IN 2015”
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| From 10 to 21 November, the 30th World Climate Conference (COP30) was hold in Belém, Brazil. Yet, despite the climate summit, there is little cause at present for celebrating progress on climate action: In 2024, the USA once again withdrew from the Paris Climate Agreement, and the global temperature rose by 1.6 degrees Celsius compared to pre-industrial times. In a short interview, ZEW environmental economist Oliver Schenker gives his assessment of the current state of the COP.
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| More about the interview
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↗ BUREAUCRACY AND RECESSION ARE DETERRING ENTREPRENEURS FROM STARTING A BUSINESS
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| The number of business foundations in Germany is falling dramatically. According to calculations by ZEW and Creditreform Wirtschaftsforschung, only around 161,000 new companies were founded in 2024 – the lowest number in decades. For comparison: Between 2015 and 2021, the average was still around 168,000 business foundations per year, and in the early 2000s it was even over 200,000. “Although digital technologies are gaining in importance, they are not immune to the weak economy,” explains ZEW researcher Sandra Gottschalk.
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In the journal Wirtschaftsdienst, ZEW President Achim Wambach and ZEW Research Group head Simon Reif analyse why the digital transformation of Germany’s health care system has been stagnating for years. They highlight the substantial potential of data-driven innovation but also warn of emerging monopoly risks, calling for clear regulations and long-term investments to finally accelerate digital progress.
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| Read the full opinion piece
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| | REVIEW
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| ↗ FIRST-HAND INFORMATION ON ECONOMIC POLICY
Nobel Laureate Sheds Light on Market Mechanisms in Online Advertising
In the digital advertising market, complex auctions determine the interactions between market players. In addition to high bidder numbers, short-term transactions and a broadly diversified media market, the bundling of bids on advertising platforms and provider behaviour across platforms increase this complexity. Paul Milgrom, laureate of the Nobel Prize in Economics, explained the effects of this and the role market design plays in this context during a talk at a “First-Hand Information on Economic Policy” event organised by ZEW on 8 October 2025.
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| | ↗ EVENT SERIES ORGANISED BY ZEW AND THE FOUNDATION MVV STIFTUNG ZUKUNFT
Energy Transition Under Scrutiny
Transforming our energy supply towards a low-carbon infrastructure is essential for mitigating climate change, yet it also entails considerable economic costs. Broad public support is required for the energy transition to succeed. A crucial question is how the associated costs are distributed – and whether this distribution is perceived as fair. A forum for discussing these issues was provided by the “Environmental and Climate Economics” Research Unit at ZEW, which was organising a three-part series of events in cooperation with the MVV Stiftung Zukunft.
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| | | | → CONTACT FOR QUESTIONS OR SUGGESTIONS ON THE CONTENT | |
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| | | | | ZEW – Leibniz Centre for European Economic Research
L7, 1 · 68161 Mannheim
Phone: +49 (0)621/1235-01
E-mail: zewmonthly@zew.de
Website: www.zew.de
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| | | | | Executive Directors:
Professor Achim Wambach, PhD; Claudia von Schuttenbach
Chair of the ZEW Supervisory Board:
Ministerial Director Dr. Hans Reiter
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Local Court Mannheim HRB 6554
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