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This paper investigates the relationship between labour hoarding practices and training investments during severe economic downturns focusing on the case of Italy during the Great Recession.

Data come from the 2010 Italian wave of Continuing Vocational Training Survey (CVTS). Econometric estimates plug a proxy of labour hoarding into the probability function that firms provide either off-the-job or on-the-job training. A bivariate selectivity probit model is also used for robustness sake.

Results show that labour hoarding should not be considered as an enhancer of training investments when considered as a standing-alone practice in presence of severe and deep economic downturn. However, labour hoarding does not penalize off-the-job training investments if it occurs in an innovative firm or in a firm that perceive specific skill requirements in the workforce during the recessionary period.

The paper contributes to the debate on the role of labour hoarding during severe recessions by showing that it cannot be functional to re-oriented firms’ investments aimed at upskilling their workforce. It is only compatible with new training courses that accompany the workforce across a technological transition. Policy implications deals with the suitability of job retention schemes or state-financed furlough during recessions, as occurred during the coronavirus disease 2019 (COVID-19) pandemic.

The modern concept of labor hoarding emerged in early 1960s, and soon became a standard part of mainstream economists’ explanation of the working of labor markets. The concept represents the convergence of three important elements: an empirical finding that labor productivity was procyclical; a framing of this finding as a “puzzle” or anomaly for the basic neoclassical theory of the firm, and a proposed resolution of the puzzle based on optimizing behavior of the firm in the presence of costs of hiring, firing, and training workers. This paper recounts the history of each of these elements, and how they were woven together into the labor hoarding concept. Each history involves people associated with various research traditions and motivated by an array of questions, many of which were unrelated to the questions that the modern labor hoarding concept was ultimately created to address.

This paper aims to test the hypothesis that the effect of production slowdown on labour demand can be muted by labour hoarding.

This study adopts a production function approach, using data from Malta, a small state in the EU.

The results confirm the hypothesis and indicate that firms are normally prepared to employ and dismiss more workers in the long run than in the short run.

This finding has important implications for developed countries, including that labour hoarding can be of certain relevance in times of economic slowdown as shocks are absorbed by internal flexibility.

The results of this study add on to the existing literature in two ways. First, this study compares two industries –manufacturing and financial services– for which the former sector received support to hoard labour after the financial turmoil of 2008. Consequently, the dominance of labour hoarding in manufacturing relative to financial services is uncovered and the effect of hoarding practices on labour demand is estimated. Second, Malta is an interesting case because it is one of the smallest economies in the world and faces a high degree of vulnerability because of constraints associated with small size and insularity. As a result, firms adopt policy-induced measures to minimise adjustment costs.

The purpose of this paper is to provide a human resource management perspective of the workforce adjustment strategies implemented at workplaces in Britain in response to the Great Recession.

The analysis uses an ordered probit and a series of binomial probits to examine a micro data set from the 2011 Workplace Employment Relations Study.

Not all workplaces were affected equally by the recession. Not all workplaces chose to implement workforce adjustment strategies consequential of the recession, although the probability of a workplace taking no action decreased the greater the adverse effect of the recession on the workplace. Most workplaces used a combination of workforce adjustment strategies. Workplaces implemented strategies more compatible with labour hoarding than labour shedding, i.e., cutting/freezing wages and halting recruitment to fill vacant posts rather than making employees redundant.

What was examined was the incidence of the workforce adjustment strategies, not the number of employees affected by the implementation of a strategy. Further, what was examined were outcomes. What is not known are the processes by which these outcomes were arrived at.

This paper concurs with the findings of previous economic studies that workplaces hoarded labour, cut hours and lowered pay. In so doing, however, it provides a more detailed and more informed human resource management perspective of these adjustment strategies.

The choice of Southern Europe is partly based on the observation that the sample includes a number of countries whose economies faced more severe difficulties than elsewhere in Europe. Economically they were less able to absorb the economic shock posed by COVID-19. It is also partly based on the characteristics of the pandemic. A number of countries in the sample were amongst the earliest in Europe to be hit by the pandemic and a several were harder hit in terms of both morbidity and mortality.

This study uses evidence from World Bank enterprise surveys of a sample of firms from six countries in Southern Europe. It examines the early evidence of the effects of COVID-19 on labour markets. The economic consequences potentially cover a wide range of issues. The focus of this study is on firm level evidence of the effect on labour. The evidence and the analysis are provided at a time when the pandemic is still in progress. The authors use both traditional regression analysis and IPWRA to assess the joint effect of loans versus government support on, firstly, the change in sales revenues and, secondly, the number of weeks that the firm would expect to survive with no sales revenues.

The study suggests that, despite efforts to support firms and hoard labour, there is a prospect of a significant number of firm closures with a consequent loss of employment. Temporary firm closures also represent a substantial loss of labour weeks. These are partly related to a significant number of workers subject to furloughs. The empirical findings suggest that COVID-19 cases and deaths have directly affected firm sales but government containment measures, particularly closures, have more strongly affected firms. Losses of sales were unsurprisingly related to losses of employment. Remote working has contributed to sustaining employment but online business has not affected most sectors.

The future progress of COVID-19 and government containment measures is uncertain, and the full economic consequences will probably continue to emerge after the end of the pandemic. The full extent of the impact on labour will probably not be the first of these. There are obvious advantages in seeking to learn lessons from the early stages of the pandemic but there are also obvious constraints. The full economic consequences will take longer to emerge than the pandemic itself and the full consequences for employment will take longer to be evident than many other economic effects.

Both temporary closures and furloughs impose costs that will be borne by firms, workers and government. The effects of COVID-19 on firms differ across sectors. Adverse effects tend to be higher in hospitality, non-essential retail and travel. That many firms lack the capacity to survive further temporary closures of a similar duration to those in the earlier stages emphasises that the support provided in the near future is of critical importance to control employment losses through permanent firm closures. A long-term perspective suggests neither permanent closure nor laying off workers may be the best response to a temporary crisis in demand. A stakeholder model of the firm would often suggest that it is not an optimal for the point of view of workers or the wider economy either. Both imply a preference for labour hoarding.

The most affected are sectors with a high proportion of female workers and, in consequence, most of the countries in the sample exhibit an early decline of the already lower than average share of women in employment.

The data used have been recently released and this is the first analysis using the data to look at the consequence on firms employment decisions during the Pandemic. The case of Southern Europe is much understudied, though one of the most dramatic as to the consequences of the pandemic. From a methodological point of view, the authors use not only traditional regression analysis, but also the matching approach to identify the effect of different policy options on labour demand by firms.

Has the character of adjustment of labor input in the US manufacturing sector been changing over the last few decades? This question is addressed with time‐series estimation using data through 2001. Impulse responses of employment and average weekly hours to a given shock in output demand are generated from multi‐equation vector autoregressions. The results reveal a marked change in the character of labor input adjustment as compared with the two decades prior to 1979, with some heterogeneity among 18 detailed industries. Adjustment of hours has risen somewhat while adjustment of employment has dropped considerably. This intensifying adjustment of hours vis‐à‐vis employment is consistent with hypotheses regarding employers' potential reactions to a skill‐upgrading of jobs under greater market pressures to restrain cost. US manufacturing employers appear to be increasingly adopting strategies of “lean staffing,” while “hoarding” and shedding work hours, in response to cyclical fluctuation in demand. This phenomenon may be a structural change contributing to a recent “jobless recovery” in the US.

The relevance of finance for strategy is probably never greater than during a recession. We argue that the strategy literature has been virtually silent on the issue of recessions, and that this constitutes a regrettable sin of omission. Recessions are also periods when the commonly held view of financial markets in the strategy literature – efficient, and therefore strategically irrelevant – is particularly misplaced. A key route to rectify this omission is to focus on how recessions affect investment behavior, and thereby firms’ stocks of assets and capabilities which ultimately will affect competitive outcomes. In the present chapter, we aim to contribute by analyzing how two key aspects of recessions, demand reductions and reductions in credit availability, affect three different types of investments: physical capital, R&D and innovation, and human- and organizational capital. We synthesize and conceptualize insights from finance- and macroeconomics about how recessions affect different types of investments and find that recessions not only affect the level of investment, but also the composition of investments. Some of these effects are quite counterintuitive. For example, investments in R&D are both more and less sensitive to credit constraints than physical capital is, depending on available internal finance. Investments in human capital grow as demand falls, and both R&D and human capital investments show important nonlinearities with respect to changes in demand.

In Germany, the economic crisis 2008/09 was restricted to export-oriented industries such as automotive, chemistry, and mechanical engineering and hence to industries with a high proportion of qualified employees. Therefore, we expect the most current crisis to have a reversed effect on the relative earnings position between more and less qualified in contrast to a development that favored the more qualified since the beginning of the 1980s. Our empirical study is based on the Institute for Employment Research (IAB) Establishment Panel, a representative German establishment level panel data set that surveys information from almost 16,000 personal interviews with high ranked managers.

Despite the “German Job Miracle,” conditional difference-in-differences estimations to control for observed and unobserved heterogeneity reveal substantial employment reductions in establishments affected by the economic crisis. Falls in employment are strongest in plants with a relatively low proportion of qualified workers. Furthermore, our results indicate that the economic crisis is associated with a decline in wages, but only in those establishments that do not operate working time accounts. In sum, we do not find evidence for the current crisis having a reversed effect on the relative earnings position. Obviously once again, the higher qualified are better off than the lower qualified.

Introduction This monograph examines developments in the British labour market during the 1970s and in particular the impact of the unusual combination of high inflation and high unemployment that characterised the period. The reasons for the current high rates of unemployment are examined, and government attempts to ameliorate the problem reviewed. A growing labour force will make the Government's task more difficult and the main trends in labour supply during the seventies are described; changes in differentials and in the dispersion of earnings are evaluated and the effects of inflation and incomes policies assesed. Finally we analyse perhaps the most important area for policy‐makers, developments in the collective bargaining structure and in the role of trade unions.