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. |
