IDEAS home Printed from https://ideas.repec.org/p/yor/yorken/13-10.html
   My bibliography  Save this paper

To Have and to Hold: A Dynamic Cost-Benefit Analysis of Temporary Unemployment Measures

Author

Listed:
  • Kuno J.M. Huisman
  • Jacco J.J. Thijssen

Abstract

This paper analyses the temporary unemployment regulations that several governments of European countries have introduced during the recent recession. We view these measures as a collection of real options that governments provide to firms and value these options. We study, in particular, the effect of such measures on the liquidation decision of the firm. In addition, we study the effect of government limitations on the duration of the programme. We find that temporary unemployment measures delay a firm’s liquidation. However, since the costs of the programme are incurred before the benefits, the discounted benefit-to-cost ratio does not necessarily indicate the programme is good for welfare.

Suggested Citation

  • Kuno J.M. Huisman & Jacco J.J. Thijssen, 2013. "To Have and to Hold: A Dynamic Cost-Benefit Analysis of Temporary Unemployment Measures," Discussion Papers 13/10, Department of Economics, University of York.
  • Handle: RePEc:yor:yorken:13/10
    as

    Download full text from publisher

    File URL: https://www.york.ac.uk/media/economics/documents/discussionpapers/2013/1310.pdf
    File Function: Main text
    Download Restriction: no

    References listed on IDEAS

    as
    1. Jacco Thijssen, 2010. "Irreversible investment and discounting: an arbitrage pricing approach," Annals of Finance, Springer, vol. 6(3), pages 295-315, July.
    2. Alexander Hijzen & Danielle Venn, 2011. "The Role of Short-Time Work Schemes during the 2008-09 Recession," OECD Social, Employment and Migration Working Papers 115, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Temporary unemployment; Real options; Dynamic cost-benefit analysis;

    JEL classification:

    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:yor:yorken:13/10. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Paul Hodgson). General contact details of provider: http://edirc.repec.org/data/deyoruk.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.