Abstract
Abstract There has been a strong interest in short-time work (STW) schemes during the global financial crisis. Using data for 23 OECD countries for the period 2004 Q1 to 2010 Q4, this paper analyses the quantitative effects of STW programmes on labour market outcomes. Special attention is given to the dynamic aspects of the relationship between output shocks and labour market outcomes. The results indicate the STW raises hours flexibility by increasing the output elasticity of working time and helps to preserve jobs in the context of a recession by making employment and unemployment less elastic with respect to output. A key finding is that the timing of STW is crucial. While STW helped preserving a significant number of jobs during the crisis, its continued use during the recovery may have slowed the job-content of the recovery. By the end of 2010, the net effect of STW on employment was negligible or may even have become negative. However, the gross impact of STW on the number of jobs saved per quarter remains large and positive in the majority of countries. JEL codes J23; J65; J68
Highlights
Short-time work (STW) programmes are public schemes that are intended to preserve jobs at firms experiencing temporarily low demand by encouraging work-sharing, while providing income-support to workers whose hours are reduced due to a shortened workweek or temporary lay-offs
The same estimates suggest that the continued use of short-time work (STW) during the recovery exerted a negative influence over the job-content of the recovery
There has been a strong interest in short-time work (STW) schemes during the global financial crisis
Summary
Short-time work (STW) programmes are public schemes that are intended to preserve jobs at firms experiencing temporarily low demand by encouraging work-sharing, while providing income-support to workers whose hours are reduced due to a shortened workweek or temporary lay-offs. Provide an early assessment of the impact of STW schemes on preserving jobs during the crisis Their estimates support the conclusion that STW schemes had an economically important impact, with the largest impacts of STW on employment in Germany and Japan among the countries considered. This paper analyses the quantitative effects of STW programmes on employment and hours by exploiting the country and time variation in STW take-up rates It provides an update on the initial assessment by Hijzen and Venn (2010) by extending the time and country coverage of the dataset from 2004 Q1-2009 Q3 to 2004 Q1-2010 Q4 and from 19 to 23 countries.
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