International perspectives on applying short-time work during the Covid-19 crisis

Virtually all OECD countries operated some sort of short-time work scheme during the Covid-19 crisis. Some countries adapted pre-existing schemes by easing access and increasing generosity, while others introduced temporary programmes at the beginning of the pandemic. Short-time work schemes achieved record high levels of take-up, covering about one in five jobs on average across the OECD at its peak in April/May 2020. There is little doubt that the widespread use of short-time work schemes saved many jobs, helped prevent a surge in unemployment and financial hardship among workers, and contributed to containing the spread of the virus by allowing workers to stay at home. However, important questions about the number of jobs saved, the associated costs, misuse, or adverse effects on reallocation processes remain unanswered. This IAB-Forum series takes a look at how selected countries designed their short-time work schemes with regard to the dilemma of quickly getting the support to where it is needed and, at the same time, preventing negative effects. In interviews with experts from Australia, France, Germany, Italy, Spain, and the OECD, the country-specific programme elements aimed at preventing misuse, such as experience rating, incentivize benefit recipients to look for a new job, or supported employers to offer on-the-job-training, are discussed. This interview series shall shed light on the lessons learned from the widespread use of short-time work since 2020.

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