Hope for the best and prepare for the worst. Do short-time work schemes help workers remain in the same firm?
International Journal of Manpower
ISSN: 0143-7720
Article publication date: 4 December 2020
Issue publication date: 8 July 2021
Abstract
Purpose
This paper investigates whether short-time work (STW) schemes were successful in their objective of maintaining employment and keeping workers employed within the same firms after the onset of the financial and economic crisis in 2008.
Design/methodology/approach
Spanish longitudinal administrative data has been used, making it possible to identify short-time work (STW) participation not only of workers but also of employers and allowing to know the future labour market status of participants and non-participants. Accordingly, treatment and control groups are defined, and Propensity Score Matching models estimated. The dependent variable is measured as the probability that an individual remained employed with the same employer in the future (one, two and three years) after implementation of a STW arrangement.
Findings
Our results suggest that treated individuals are about 5 percentage points less likely to remain working with the same employer one year later than similar workers, and this negative effect of participation increases over time. Thus, STW schemes would not have the assumed effect of preventing unemployment by keeping the participants employed relative to non-participants.
Research limitations/implications
As our analysis is based on the comparison of the employment trajectories of participant and non-participant workers in firms that have used STW arrangements, our findings cannot be interpreted as the job saving effects of either macro or micro studies carried out previously.
Practical implications
The analysis carried out in the paper is complementary to the country-level and firm-level approaches that have been used in the empirical literature.
Originality/value
We adopt a worker-level approach. This is novel since no previous study has focused attention on the impact of STW participation on the subsequent labour market status of workers.
Keywords
Acknowledgements
The authors gratefully acknowledge financial support from the Spanish Ministry of Economy and Competitiveness (Programa Estatal de I+D+i Orientada a los Retos de la Sociedad, ECO2014-57623-R) and from the Institute of Fiscal Studies (Madrid) under the contract “Evaluación del impacto de políticas públicas: las prestaciones por desempleo y los expedientes de regulación de empleo”. Thanks are extended to professor S. Pi Nette and various seminar and conference participants for their valuable comments and suggestions. The authors also wish to thank the Spanish Social Security for providing the data for this research. Obviously, the opinions and analyses are the responsibility of the authors. The usual disclaimer applies.
Citation
Arranz, J.M., García-Serrano, C. and Hernanz, V. (2021), "Hope for the best and prepare for the worst. Do short-time work schemes help workers remain in the same firm?", International Journal of Manpower, Vol. 42 No. 5, pp. 935-959. https://doi.org/10.1108/IJM-04-2020-0178
Publisher
:Emerald Publishing Limited
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