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The Value of Preserving Job Matches During a Crisis

Author

Listed:
  • Bennedsen, Morten
  • Larsen, Birthe
  • Schmutte, Ian
  • Scur, Daniela

Abstract

It is generally difficult to measure the importance of preserving worker-firm relationships, particularly for low-wage jobs that involve general skills. The COVID-19 pandemic led to the sudden and seemingly temporary disruption of millions of otherwise productive employment relationships around the world. Using novel administrative and survey data from Denmark, we study a policy where firms paid up to 25% of wages to furlough instead of firing workers. We find firms derive value from maintaining ties to low-wage and blue collar workers and that preserving those matches is beneficial to firms, suggesting policies that preserve job matches may help speed-up recovery.

Suggested Citation

  • Bennedsen, Morten & Larsen, Birthe & Schmutte, Ian & Scur, Daniela, 2025. "The Value of Preserving Job Matches During a Crisis," CEPR Discussion Papers 19867, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:19867
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    File URL: https://cepr.org/publications/DP19867
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    More about this item

    Keywords

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    JEL classification:

    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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