Date Added: Apr 2011
The Great Recession triggered a resurgence of Short-Time Work (STW) throughout the OECD. Several countries introduced from scratch STW or significantly expanded the scope of the programmes already in place. In some countries like Italy, Japan and Germany between 2.5 and 5 per cent of the workforce participated in short-time work schemes at the trough of the recession. In this paper, the authors analyze the rationale for short time work benefits and their effects on labour adjustment from both a cross-country and a time-series perspective. They find that STW actually contributed to reduce job losses during the Great Recession.