Dilemmas Of Downsizing During the Great Recession: Crisis Strategies of European Employers
AbstractSummary The present paper analyzes the choices faced by European employers when threatened with the prospect of the mass lay-off of their employees as a result of the Great Recession. By means of a representative survey among employers in Italy, Germany, Denmark, Poland, the Netherlands and Sweden in 2009, we show that employers mainly prefer to tackle such threats by offering short-time work, and by early retirement packages to older workers, in conjunction with buy-outs. The latter preference is particularly visible in countries where employers perceive the level of employment protection to be high. The only notable exception is Denmark, where employers prefer to reduce working hours. In general, a sense of generational fairness influences downsizing preferences, with those employers who favor younger workers particularly likely to use early retirement and buy-outs when downsizing, followed by working time reductions. Wage reductions and administrative dismissal are less favored by European employers. In particular, CEOs and owners are more inclined than lower-level managers to cut wages.
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Bibliographic InfoPaper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2013-026.
Date of creation: 2013
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Web page: http://center.uvt.nl
downsizing; early retirement; fairness; older workers; recession;
Other versions of this item:
- Hendrik Dalen & Kène Henkens, 2013. "Dilemmas of Downsizing During the Great Recession: Crisis Strategies of European Employers," De Economist, Springer, vol. 161(3), pages 307-329, September.
- D2 - Microeconomics - - Production and Organizations
- J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
This paper has been announced in the following NEP Reports:
- NEP-AGE-2013-05-19 (Economics of Ageing)
- NEP-ALL-2013-05-19 (All new papers)
- NEP-EUR-2013-05-19 (Microeconomic European Issues)
- NEP-HRM-2013-05-19 (Human Capital & Human Resource Management)
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