Short-time work, its replacement rate and labour mobility

Gaetano Basso (), Emanuele Ciani (), Francesco Manaresi () and Lorenzo Pesaresi ()
Additional contact information
Gaetano Basso: Bank of Italy
Emanuele Ciani: Bank of Italy
Francesco Manaresi: Bank of Italy
Lorenzo Pesaresi: Bank of Italy

No 1544, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: This paper studies the impact of the short-time work (STW) replacement rate on workers' job-to-job mobility. Exploiting a discontinuity in the Italian STW benefit schedule and matched employer-employee data, we show that a 10-percentage-point increase in the replacement rate raises the probability of remaining with the current employer by 3 per cent, thereby reducing job-to-job flows. The effect is driven by low-ability workers, who are less likely to move to higher-paying firms, suggesting a deterioration in workforce quality among firms relying on STW. We develop a model to rationalise these results and derive an optimal STW benefit formula. The fiscal externality is positive but smaller than that generated by unemployment benefits.

Keywords: short-time work; job mobility; regression discontinuity (search for similar items in EconPapers)
JEL-codes: H25 J62 J68 (search for similar items in EconPapers)
Date: 2026-10
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.bancaditalia.it/pubblicazioni/temi-dis ... 544/en_tema_1544.pdf (application/pdf)

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:bdi:wptemi:td_1544_26

Access Statistics for this paper

More papers in Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area Contact information at EDIRC.
Bibliographic data for series maintained by ().