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The Role of Short-Time Work Schemes during the 2008-09 Recession

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  • Alexander Hijzen
  • Danielle Venn

Abstract

The present paper provides the most comprehensive assessment to date of the impact of short-time work (STW) schemes during the 2008-09 crisis. The analysis covers 19 OECD countries, 11 of which operated a short-time work scheme before the crisis, five countries introduced a new scheme during the crisis period and three countries never had a short-time work scheme. In order to identify the causal effects of short-time work, a difference-in-differences approach is adopted that exploits the variation in labour-adjustment patterns and the intensity with which STW schemes are used across countries and time. The estimates support the conclusion that STW schemes had an economically important impact on preserving jobs during the economic downturn, with the largest impacts of STW on employment in Germany and Japan among the 16 countries considered. However, the positive impact of STW was limited to workers with permanent contracts, thereby further increasing labour market segmentation between workers in regular jobs and workers in temporary and part-time jobs. The estimated jobs impact is smaller than the potential number of jobs saved as implied by the full-time equivalent number of participants in short-time work, suggesting that STW schemes end up supporting some jobs that would have been maintained in the absence of the subsidy. However, the estimated deadweight is less than that usually estimated for other job subsidy measures. As the OECD area is only just starting to emerge from the crisis, it is still too early to assess the impact of STW schemes in the longer term. Indeed, the main concerns about STW schemes relate to their potentially adverse impacts on the vigour of employment growth during the recovery and economic restructuring in the longer run. Ce document fournit l'évaluation la plus complète à ce jour de l'impact des dispositifs de chômage partiel au cours de la crise de 2008-09. L'analyse couvre 19 pays de l'OCDE, dont 11 disposant d’un dispositif de chômage partiel avant la crise, cinq pays en ayant introduit un nouveau au cours de la période de crise et trois pays n'en ayant jamais eu. Afin d'identifier les effets de causalité du chômage partiel, une approche par différence en différences est adoptée, qui exploite la variation dans les modalités d’ajustement de l’emploi et l'intensité avec laquelle les dispositifs de chômage partiel sont utilisés à travers les pays et le temps. Les estimations viennent étayer la conclusion selon laquelle les systèmes d’indemnisation du chômage partiel ont un impact économique important dans la préservation de l’emploi en phase de ralentissement de l’économie, avec des dispositifs de chômage partiel ayant les plus forts impacts sur l’emploi parmi les 16 pays considérés en Allemagne et au Japon. Toutefois, l’incidence bénéfique du chômage partiel s’est limitée aux effectifs permanents, creusant ainsi encore davantage le fossé avec les travailleurs temporaires et à temps partiel L'impact estimé sur l’emploi est plus faible que le nombre potentiel d'emplois sauvés comme le sous-entend le nombre de participants au chômage partiel en équivalent plein temps, ce qui donne à penser que les dispositifs de chômage partiel soutiennent certains emplois qui auraient été maintenus même sans subvention. Toutefois, l’effet d’aubaine est inférieur à celui qui est généralement estimé pour d’autres types d’aides à l’emploi. La zone OCDE étant tout juste en train de sortir de la crise, il est trop tôt encore pour déterminer l’impact des dispositifs de chômage partiel à plus long terme. En effet, les principales préoccupations concernant les dispositifs de chômage partiel tiennent à leur impact potentiellement négatif sur la vigueur de la croissance de l'emploi pendant la reprise et les restructurations économiques à plus long terme.

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Bibliographic Info

Paper provided by OECD Publishing in its series OECD Social, Employment and Migration Working Papers with number 115.

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Date of creation: 17 Jan 2011
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Handle: RePEc:oec:elsaab:115-en

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Is Short-Time Work a Good Way to Fight Unemployment?
    by Mark Thoma in Economist's View on 2011-02-01 01:50:26
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Cited by:
  1. Brown, Alessio J. G. & Koettl, Johannes, 2012. "Active Labor Market Programs: Employment Gain or Fiscal Drain?," IZA Discussion Papers 6880, Institute for the Study of Labor (IZA).
  2. Olivier Bargain & Herwig Immervoll & Andreas Peichl & Sebastian Siegloch, 2011. "Distributional Consequences of Labor-demand Shocks: The 2008-09 Recession in Germany," CESifo Working Paper Series 3403, CESifo Group Munich.
  3. Starke, Peter & Kaasch, Alexandra & van Hooren, Franca, 2011. "Explaining the variety of social policy responses to economic crisis: How parties and welfare state structures interact," TranState Working Papers 154, University of Bremen, Collaborative Research Center 597: Transformations of the State.
  4. Kambayashi, Ryo & Kato, Takao, 2011. "Long-term Employment and Job Security over the Last Twenty-Five Years: A Comparative Study of Japan and the U.S," IZA Discussion Papers 6183, Institute for the Study of Labor (IZA).
  5. John Schmitt, 2011. "Labor Market Policy in the Great Recession: Some Lessons from Denmark and Germany," CEPR Reports and Issue Briefs 2011-12, Center for Economic and Policy Research (CEPR).
  6. Hansen, Ellen & Avila, Zulum, 2012. "Preliminary assessment of training and retraining programmes implemented in response to the Great Recession :," ILO Working Papers 468419, International Labour Organization.
  7. Cahuc, Pierre & Carcillo, Stéphane, 2011. "Is Short-Time Work a Good Method to Keep Unemployment Down?," IZA Discussion Papers 5430, Institute for the Study of Labor (IZA).
  8. Hijzen, Alexander & Martin, Sébastien, 2013. "The Role of Short-Time Work Schemes during the Global Financial Crisis and Early Recovery: A Cross-Country Analysis," IZA Discussion Papers 7291, Institute for the Study of Labor (IZA).
  9. Scholz, Theresa, 2012. "Employers' selection behavior during short-time work," IAB Discussion Paper 201218, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  10. Sandrine LEVASSEUR, 2012. "Labour market adjustments in Estonia during the 2008/2011 crisis," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 3, pages 123-143, June.
  11. Kuno J.M. Huisman & Jacco J.J. Thijssen, 2013. "To Have and to Hold: A Dynamic Cost-Benefit Analysis of Temporary Unemployment Measures," Discussion Papers 13/10, Department of Economics, University of York.
  12. Olivier Bargain & Herwig Immervoll & Andreas Peichl & Sebastian Siegloch, 2012. "Distributional consequences of labor-demand shocks: the 2008–2009 recession in Germany," International Tax and Public Finance, Springer, vol. 19(1), pages 118-138, February.

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