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Protecting Jobs, Preserving Efficiency: Insights from European Short‑Time Work Schemes

Author

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  • Natalia Bermúdez
  • Muriel Dejemeppe
  • Giulia Tarullo

Abstract

[eng] Short‑time work (STW) programmes have been central to European labour‑market policy during the Great Recession and COVID‑19. This survey integrates theory, cross‑country institutional design, and microeconometric evidence to assess whether and how STW succeeds in stabilising employment, preserving firm‑specific human capital, and mitigating employees’ loss of earnings. Comparative analysis of Belgium, France, Germany, and Italy shows that targeting temporary shocks, combining monitoring with financial incentives for beneficiary firms, and limiting programme duration are crucial to maximise benefits. By contrast, untargeted or prolonged STW not only generates deadweight losses but also delays necessary labour reallocation. Well‑designed programmes support firms and workers efficiently while preserving labour‑market adjustment.

Suggested Citation

  • Natalia Bermúdez & Muriel Dejemeppe & Giulia Tarullo, 2025. "Protecting Jobs, Preserving Efficiency: Insights from European Short‑Time Work Schemes," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 549, pages 51-73.
    • Handle: RePEc:nse:ecosta:ecostat_2025_549_3
    DOI: https://doi.org/10.24187/ecostat.2025.549.2144
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