When Short-Time Work Works

Pierre Cahuc, Francis Kramarz () and Sandra Nevoux

Working papers from Banque de France

Abstract: Short-time work programs were revived by the Great Recession. To understand their operating mechanisms, we first provide a model showing that short-time work may save jobs in firms hit by strong negative revenue shocks, but not in less severely-hit firms, where hours worked are reduced, without saving jobs. The cost of saving jobs is low because short-time work targets those at risk of being destroyed. Using extremely detailed data on the administration of the program covering the universe of French establishments, we devise a causal identification strategy based on the geography of the program that demonstrates that short-time work saved jobs in firms faced with large drops in their revenues during the Great Recession, in particular when highly levered, but only in these firms. The measured cost per saved job is shown to be very low relative to that of other employment policies.

Keywords: Short-time work; unemployment; employment. (search for similar items in EconPapers)
JEL-codes: E24 J22 J65 (search for similar items in EconPapers)
Pages: 67 pages
Date: 2018
New Economics Papers: this item is included in nep-eur, nep-lab, nep-ltv and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (59)

Downloads: (external link)
https://publications.banque-france.fr/sites/defaul ... /documents/wp692.pdf (application/pdf)

Related works:
Working Paper: When Short-Time Work Works (2018)
Working Paper: When Short-Time Work Works (2018)
Working Paper: When Short-Time Work Works (2018)
Working Paper: When Short-Time Work Works (2018)
Working Paper: When Short-Time Work Works (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:bfr:banfra:692

Access Statistics for this paper

More papers in Working papers from Banque de France Banque de France 31 Rue Croix des Petits Champs LABOLOG - 49-1404 75049 PARIS. Contact information at EDIRC.
Bibliographic data for series maintained by Michael brassart ().