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The Substitution of Worksharing and Short-Time Compensation in France: A Difference-in-differences Approach

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  • Richard Duhautois

    () (CEE-TEPP, University of Paris-Est- Marne-la-Vallée and CREST)

  • Emmanuelle Walkowiak

    () (University of Paris 12-ERUDITE and CEE)

  • Oana Calavrezo

    () (LEO, University of Orleans and CEE)

Abstract

The short-time compensation (STC) program aims at avoiding redundancies in case of strong short-term downturns. In the literature, STC is an instrument of both job security and flexibility. This paper investigates the impact of worksharing on STC in France. The form of worksharing examined in this study is the reduction of the standard or contractual hours worked per week to 35 hours in France. We quantify the average decrease in the STC recourse with difference-in-differences estimators assessed on a balanced panel of French establishments. We highlight a substitution effect between STC and worksharing due to their internal flexibility role. As a consequence, STC seems to be less used as a flexibility device and the worksharing policy would refocus STC on its employment protection role.

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File URL: http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I2-P32.pdf
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Bibliographic Info

Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 29 (2009)
Issue (Month): 2 ()
Pages: 820-833

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Handle: RePEc:ebl:ecbull:eb-08j20016

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  1. Burdett, Kenneth & Wright, Randall, 1989. "Unemployment Insurance and Short-Time Compensation: The Effects on Layoffs, Hours per Worker, and Wages," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1479-96, December.
  2. Van Audenrode, Marc A, 1994. "Short-Time Compensation: Job Security, and Employment Contracts: Evidence from Selected OECD Countries," Journal of Political Economy, University of Chicago Press, vol. 102(1), pages 76-102, February.
  3. Askenazy, Philippe, 2008. "A Primer on the 35-Hour in France, 1997–2007," IZA Discussion Papers 3402, Institute for the Study of Labor (IZA).
  4. Katharine G. Abraham & Susan N. Houseman, 1994. "Does Employment Protection Inhibit Labor Market Flexibility? Lessons from Germany, France, and Belgium," Book chapters authored by Upjohn Institute researchers, in: Rebecca M. Blank (ed.), Social Protection Versus Economic Flexibility: Is There a Trade-off?, pages 59-93 W.E. Upjohn Institute for Employment Research.
  5. Kapteyn, Arie & Kalwij, Adriaan & Zaidi, Asghar, 2004. "The myth of worksharing," Labour Economics, Elsevier, vol. 11(3), pages 293-313, June.
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Cited by:
  1. Calavrezo, Oana & Duhautois, Richard & Walkowiak, Emmanuelle, 2010. "Short-Time Compensation and Establishment Exit: An Empirical Analysis with French Data," IZA Discussion Papers 4989, Institute for the Study of Labor (IZA).
  2. Gonthier, Pauline, 2012. "Why Was Short-Time Work Unattractive During the Crisis?," Institute for Research on Labor and Employment, Working Paper Series qt5dn0w9b1, Institute of Industrial Relations, UC Berkeley.

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