Short-time Work and Employment in the Great Recession in France

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 02.03.2017, 12:15 - 13:30


Presentation by 

Pierre Cahuc (Sciences Po, Paris)


Short-time work increased dramatically in France in 2009, during the Great Recession. Relying on administrative data covering all French establishments, we find that short-time work has had a positive impact on employment for firms which faced dramatic drop in their revenue, but for the other firms. Nevertheless, we find that the cost per saved job is about 7% of the average labor cost of a job, which is very low relative to other policies aimed at sustaining employment, such as wage subsidies, hiring subsidies, or the creation of public jobs. These 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.

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