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Understanding How Job Retention Schemes Reshape the Within-Occupation Skill Profile of Employees within Firms

Author

Listed:
  • Konstantins Benkovskis

    (Latvijas Banka)

  • Olegs Tkacevs

    (Latvijas Banka)

  • Karlis Vilerts

    (Latvijas Banka)

Abstract

This study draws on employer-employee data for Latvia to investigate how participating in a job retention scheme (JRS) impacts the within-occupation composition of skills in participating firms. The findings of this research reveal that involvement in JRS positively affects the likelihood of employees retaining their employment with the same firm after the end of the programme. This positive effect is independent of the employee's skill level. However, individuals that perform higher-skilled tasks in the same occupation are less likely to participate in the JRS because of legal restrictions on the maximum amount of the benefit and the income replacement rate. Taken together, these findings suggest that JRSs may have a detrimental impact on the within-occupation composition of the skills of the workforce at the firms that participate in such schemes.

Suggested Citation

  • Konstantins Benkovskis & Olegs Tkacevs & Karlis Vilerts, 2024. "Understanding How Job Retention Schemes Reshape the Within-Occupation Skill Profile of Employees within Firms," Working Papers 2024/02, Latvijas Banka.
    • Handle: RePEc:ltv:wpaper:202402
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    File URL: https://datnes.latvijasbanka.lv/papers/WP_2-2024.pdf
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    More about this item

    Keywords

    job retention scheme; short-term work scheme; Covid-19; employment; skills;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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