The whys and wherefores of short-time work: Evidence from 20 countries

a column by Reamonn Lydon, Thomas Y. Mathä and Stephen Millard for VOX: CEPR’s Policy Portal

Short-time work schemes are a fiscal stabiliser in Europe. Between 2010 and 2013, they were used by 7% of firms, employing 9% of workers in the region.

This column uses ECB data to show that firms use the schemes to offset negative shocks and retain high-productivity workers. High firing costs and wage rigidity increase the use of short-time work, which in turn reduces the fall in employment brought on by a recession.

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