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Pierre CAHUC (CREST-ENSAE, Ecole Polytechnique ) – “Short-Time Work and Employment in the Great Recession in France”, Joint with Francis Kramarz and Sandra Nevoux
March 19, 12:15 pm - 1:30 pm
Time: 12:15pm – 13:30 pm
Date: 19th of March 2018
Place: Room 3001
Pierre CAHUC (CREST-ENSAE, Ecole Polytechnique) – “Short-Time Work and Employment in the Great Recession in France”, Joint with Francis Kramarz and Sandra Nevoux
Abstract : We provide a model which shows that short-time work can save jobs in firms hit by strong negative revenue shocks, but not in other firms, where hours worked are reduced, without saving jobs. Nevertheless, short-time work can save jobs at much lower costs than other policies that aim to sustain employment using financial incentives, because short-time work targets jobs at risk of being destroyed more effectively. Relying on administrative data covering all French establishments, we do find that short-time work has had a positive impact on employment for firms which faced dramatic drop in their revenue, but not for the other firms, in 2009, during the great recession. The cost per saved job was also very low relative to other policies aimed at sustaining employment. Our findings suggest that short-time work can be an effective way to save jobs when the economy is hit by a recession, but they also call for a careful design of short-time work schemes.