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Preprints, Working Papers, ... Year : 2019

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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hal-03393097 , version 1 (21-10-2021)

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