Short-time work in the Great Recession: Firm-level evidence from 20 EU countries

Reamonn Lydon (), Thomas Mathä and Stephen Millard

No 124, BCL working papers from Central Bank of Luxembourg

Abstract: Using firm-level data from a large-scale European survey among 20 countries, we analyse the determinants of firms using short-time work (STW). We show that firms are more likely to use STW in case of negative demand shocks. We show that STW schemes are more likely to be used by firms with high degrees of firm-specific human capital, high firing costs, and operating in countries with stringent employment protection legislation and a high degree of downward nominal wage rigidity. STW use is higher in countries with formalised schemes and in countries where these schemes were extended in response to the recent crisis. On the wider economic impact of STW, we show that firms using the schemes are significantly less likely to lay off permanent workers in response to a negative shock, with no impact for temporary workers. Relating our STW take-up measure in the micro data to aggregate data on employment and output trends, we show that sectors with a high STW take-up exhibit significantly less cyclical variation in employment.

Keywords: Firms; survey; crisis; short-time work; wages; recession. (search for similar items in EconPapers)
JEL-codes: C25 E24 J63 J68 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2018-12
New Economics Papers: this item is included in nep-eec and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Forthcoming in IZA Journal of Labor Policy

Downloads: (external link)
https://www.bcl.lu/en/publications/Working-papers/124/BCLWP124.pdf (application/pdf)

Related works:
Journal Article: Short-time work in the Great Recession: firm-level evidence from 20 EU countries (2019)
Working Paper: Short-time work in the Great Recession: firm-level evidence from 20 EU countries (2018)
Working Paper: Short-time work in the Great Recession: Firm-level evidence from 20 EU countries (2018)
Working Paper: Short-time work in the Great Recession: firm-level evidence from 20 EU countries (2018)
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:bcl:bclwop:bclwp124

Access Statistics for this paper

More papers in BCL working papers from Central Bank of Luxembourg Contact information at EDIRC.
Bibliographic data for series maintained by ().