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Inefficient Short-Time Work

Abstract : This paper shows that the reforms which expanded short-time work in France after the great 2008-2009 recession were largely to the benefit of large firms which are recurrent short-time work users. We argue that this expansion of short-time work is an inefficient way to provide insurance to workers, as it entails cross-subsidies which reduce aggregate production. An efficient policy should provide unemployment insurance benefits funded by experience rated employers’ contributions instead of short-time work benefits. We find that short-time work entails significant production losses compared to an unemployment insurance scheme with experience rating.
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Preprints, Working Papers, ...
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https://hal-sciencespo.archives-ouvertes.fr/hal-03393097
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Submitted on : Thursday, October 21, 2021 - 9:35:47 PM
Last modification on : Saturday, October 23, 2021 - 4:10:04 AM

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Pierre Cahuc, Sandra Nevoux. Inefficient Short-Time Work. 2019. ⟨hal-03393097⟩

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