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Short-Time Work Policies During The Covid-19 Pandemic

Author

Listed:
  • Julien Albertini

    (GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne - EM - EMLyon Business School - CNRS - Centre National de la Recherche Scientifique)

  • Arthur Poirier

    (LED - Laboratoire d'Economie Dionysien - UP8 - Université Paris 8)

  • Xavier Fairise

    (GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Le Mans Université)

  • Anthony Terriau

    (GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Le Mans Université)

Abstract

In this paper, we analyze the impact of short-time work programs on the French labor market during the COVID-19 pandemic. We develop a dynamic model with incomplete markets, search frictions, human capital, and aggregate and idiosyncratic productivity shocks. We calibrate our model and simulate what the labor market response to a lockdown shock would have been under various STW programs. We show that STW succeeded in stabilizing employment and consumption but generated substantial windfall effects characterized by an excessive reduction in hours worked.

Suggested Citation

  • Julien Albertini & Arthur Poirier & Xavier Fairise & Anthony Terriau, 2022. "Short-Time Work Policies During The Covid-19 Pandemic," Post-Print halshs-04271733, HAL.
    • Handle: RePEc:hal:journl:halshs-04271733
    DOI: 10.2307/48674141
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    Cited by:

    1. Diaz, Antonia & Dolado, Juan J. & Jáñez, Álvaro & Wellschmied, Felix, 2025. "Labor reallocation effects of furlough schemes: Evidence from two recessions in Spain," European Economic Review, Elsevier, vol. 171(C).
    2. Cahuc, Pierre, 2024. "The micro and macro economics of short-time work," Handbook of Labor Economics,, Elsevier.
    3. Idriss Fontaine, 2026. "An anatomy of labor market dynamics in the French Overseas Regions: a flow-based approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 75(1), pages 1-35, March.

    More about this item

    Keywords

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    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • 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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