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The Role of Short-Time Working Schemes During the Global Financial Crisis and Early Recovery: A Cross-Country Analysis

Author

Listed:
  • Alexander Hijzen

    (OECD)

  • Sébastien Martin

    (OECD)

Abstract
There has been a strong interest in short-time work (STW) schemes during the global financial crisis. Using data for 23 OECD countries for the period 2004 Q1 to 2010 Q4, this paper analyses the quantitative effects of STW programmes on labour market outcomes by exploiting the country and time variation in STW take-up rates. The analysis takes account of differences in institutional settings across countries that might affect the relationship between labour market outcomes and output and also addresses the endogeneity of STW take-up with respect to labour market conditions. Moreover, special attention is given to the dynamic aspects of the relationship between output and labour market outcomes. The results indicate the STW raises hours flexibility by increasing the output elasticity of working time and helps to preserve jobs in the context of a recession by making employment and unemployment less elastic with respect to output. A key finding is that the timing of STW is crucial. While STW helped preserving a significant number of jobs during the crisis, its continued use during the recovery may have slowed the job-content of the recovery. By the end of 2010, the net effect of STW on employment was negligible or may even have become negative. However, the gross impact of STW on the number of jobs saved per quarter remains large and positive in the majority of countries. Au cours de la crise financière, mondiale, il y a eu un fort intérêt pour les dispositifs de chômage partiel . A l’aide de données portant sur 23 pays de l’OCDE durant la période s’étendant du premier trimestre 2004 au quatrième trimestre 2010, cet article analyse les effets quantitatifs des programmes de chômage partiel sur les résultats obtenus sur le marché du travail en exploitant la variation entre les pays et dans le temps des taux de recours au chômage partiel. L'analyse tient compte des facteurs observables entre les pays qui pourraient affecter la relation entre la situation du marché du travail et la production et aborde également l'endogénéité du recours au chômage partiel par rapport aux conditions du marché du travail. En outre, une attention particulière est accordée à la modélisation des aspects dynamiques de la relation entre la production et les résultats obtenus sur le marché du travail. Les résultats indiquent que le chômage partiel élève la flexibilité des heures en augmentant l'élasticité de la production au temps de travail et aide à préserver les emplois dans le contexte d'une récession en rendant l’emploi et le chômage moins élastique par rapport à la production. Le facteur temps est crucial pour les dispositifs de chômage partiel et constitue une conclusion importante de cet article. Alors que le chômage partiel a contribué à préserver un nombre important d'emplois pendant la crise, son utilisation continue pendant la reprise peut avoir réduit le contenu en emplois de la reprise. À la fin de l’année 2010, l'effet net du chômage partiel sur l'emploi est devenu négligeable, voire négatif. Toutefois, l'impact brut sur le nombre d'emplois sauvés par trimestre reste important et positif dans la plupart des pays.

Suggested Citation

  • Alexander Hijzen & Sébastien Martin, 2012. "The Role of Short-Time Working Schemes During the Global Financial Crisis and Early Recovery: A Cross-Country Analysis," OECD Social, Employment and Migration Working Papers 144, OECD Publishing.
    • Handle: RePEc:oec:elsaab:144-en
    DOI: 10.1787/5k8x7gvx7247-en
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    More about this item

    Keywords

    global financial crisis; partial unemployment benefits; work-sharing;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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