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Inefficient Short-Time Work

Author

Listed:
  • Cahuc, Pierre
  • Nevoux, Sandra

Abstract

This paper shows that the reforms which expanded short-time work in France after the great 2008-2009 recession were largely to the benefit of large firms which are recurrent short-time work users. We argue that this expansion of short-time work is an inefficient way to provide insurance to workers, as it entails cross-subsidies which reduce aggregate production. An efficient policy should provide unemployment insurance benefits funded by experience rated employers' contributions instead of short-time work benefits. We find that short-time work entails significant production losses compared to an unemployment insurance scheme with experience rating.

Suggested Citation

  • Cahuc, Pierre & Nevoux, Sandra, 2017. "Inefficient Short-Time Work," CEPR Discussion Papers 12269, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:12269
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Inefficient Short-Time Work
      by maximorossi in NEP-LTV blog on 2017-11-24 00:30:42

    More about this item

    Keywords

    experience rating; Short-time work; Unemployment insurance;

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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