Employment dynamics across firms during COVID-19: The role of job retention schemes

Sara Calligaris, Gabriele Ciminelli, Hélia Costa, Chiara Criscuolo, Lilas Demmou, Isabelle Desnoyers-James, Guido Franco and Rudy Verlhac

No 1788, OECD Economics Department Working Papers from OECD Publishing

Abstract: This paper analyses employment dynamics across firms during the COVID-19 pandemic and the role of job retention schemes (JRS) in shaping these dynamics. It relies on a novel collection of high-frequency harmonised micro-aggregated statistics, computed using administrative data on employment and wages from electronic payroll records across 12 countries linked to monthly information on policy support during COVID-19, as well as on a new indicator of JRS de-jure generosity. The analysis highlights four key findings: i) the employment adjustment margins varied over time, adjusting mainly through the intensive margin in 2020, while both the intensive and the extensive margins contributed to employment changes in 2021; ii) the reallocation process remained productivity enhancing, although to a lower extent on average compared to 2019; iii) JRS were successful in their purpose of cushioning the effect of the crisis on employment growth and firm survival; iv) JRS support did not distort the productivity-enhancing nature of reallocation.

Keywords: COVID-19; Employment dynamics; Job retention schemes; Productivity; Reallocation (search for similar items in EconPapers)
JEL-codes: D22 D24 J08 J2 O47 (search for similar items in EconPapers)
Date: 2023-12-21
New Economics Papers: this item is included in nep-eec and nep-lma
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Persistent link: https://EconPapers.repec.org/RePEc:oec:ecoaaa:1788-en

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