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Short-time work policies during the COVID-19 pandemic

Julien Albertini, Xavier Fairise (), Arthur Poirier and Anthony Terriau

No 2204, Working Papers from Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon

Abstract: In this paper, we analyze the impact of short-time work programs on the French labor market during the COVID-19 pandemic. We develop a dynamic model with incomplete markets, search frictions, human capital, and aggregate and idiosyncratic productivity shocks. We calibrate our model and simulate what the labor market response to a lockdown shock would have been under various STW programs. We show that STW succeeded in stabilizing employment and consumption but generated substantial windfall effects characterized by an excessive reduction in hours worked.

Keywords: COVID-19; matching frictions; short-time work policies; incomplete markets. (search for similar items in EconPapers)
JEL-codes: E21 E24 J24 J38 J63 J65 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-dge, nep-eur, nep-hea, nep-lma and nep-mac
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Downloads: (external link)
https://www.gate.cnrs.fr/RePEc/2022/2204.pdf (application/pdf)

Related works:
Journal Article: Short-Time Work Policies During the Covid-19 Pandemic (2022) Downloads
Working Paper: SHORT-TIME WORK POLICIES DURING THE COVID-19 PANDEMIC (2022)
Working Paper: Short-time work policies during the COVID-19 pandemic (2022) Downloads
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