Short-time work, labor hoarding, and curtailed hiring: establishment-level evidence from Japan

Chiu-Wei Kuo ()
Additional contact information
Chiu-Wei Kuo: Asia Pacific Institution of Research

Journal for Labour Market Research, 2024, vol. 58, issue 1, 1-16

Abstract: Abstract This study analyzes the mechanisms by which short-time work (STW) schemes affect firm’s employment adjustments, using establishment-level data during the Great Recession from Japan. The findings show that STW leads to a decrease in both hiring and separations, with no significant positive effect on net employment. The observed curtailed hiring can be explained within the context of how STW promotes labor hoarding. STW encourages firms to maintain redundant employment by subsidizing the costs of labor hoarding. The excess labor surplus in firms adopting STW diminishes the incentive to recruit new workers in anticipation of the recovery period. Furthermore, as firms generally lack the motivation to hoard marginal workers, STW may exacerbate job security disparities between regular and marginal workers. These findings have important implications for policy evaluation, emphasizing the need for a comprehensive understanding of the potential adverse consequences of STW on labor market entrants and marginal workers.

Keywords: Short-time work; Labor hoarding; Scarring effect; The Great Recession (search for similar items in EconPapers)
JEL-codes: J08 J23 J63 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1186/s12651-024-00365-y Abstract (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:jlabrs:v:58:y:2024:i:1:d:10.1186_s12651-024-00365-y

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/12651

DOI: 10.1186/s12651-024-00365-y

Access Statistics for this article

Journal for Labour Market Research is currently edited by Joachim Möller

More articles in Journal for Labour Market Research from Springer, Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB)
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().