Protecting Jobs, Preserving Efficiency: Insights from European Short‑Time Work Schemes

Natalia Bermúdez, Muriel Dejemeppe and Giulia Tarullo
Authors registered in the RePEc Author Service: Natalia Bermúdez Barrezueta

Economie et Statistique / Economics and Statistics, 2025, issue 549, 51-73

Abstract: [eng] Short‑time work (STW) programmes have been central to European labour‑market policy during the Great Recession and COVID‑19. This survey integrates theory, cross‑country institutional design, and microeconometric evidence to assess whether and how STW succeeds in stabilising employment, preserving firm‑specific human capital, and mitigating employees’ loss of earnings. Comparative analysis of Belgium, France, Germany, and Italy shows that targeting temporary shocks, combining monitoring with financial incentives for beneficiary firms, and limiting programme duration are crucial to maximise benefits. By contrast, untargeted or prolonged STW not only generates deadweight losses but also delays necessary labour reallocation. Well‑designed programmes support firms and workers efficiently while preserving labour‑market adjustment.

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:nse:ecosta:ecostat_2025_549_3

DOI: 10.24187/ecostat.2025.549.2144

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