Hope for the best and prepare for the worst. Do short-time work schemes help workers remain in the same firm?

Abstract

Purpose &- This paper investigates whether short-time work (STW) schemes were successful in their objectiveof maintaining employment and keeping workers employed within the same firms after the onset of thefinancial and economic crisis in 2008.Design/methodology/approach &- Spanish longitudinal administrative data has been used, making itpossible to identify short-time work (STW) participation not only of workers but also of employers andallowing to know the future labour market status of participants and non-participants. Accordingly, treatmentand control groups are defined, and Propensity Score Matching models estimated. The dependent variable ismeasured 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 remainworking with the same employer one year later than similar workers, and this negative effect of participationincreases over time. Thus, STW schemes would not have the assumed effect of preventing unemployment bykeeping the participants employed relative to non-participants.Research limitations/implications &- As our analysis is based on the comparison of the employmenttrajectories of participant and non-participant workers in firms that have used STW arrangements, ourfindings 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 andfirm-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 focusedattention on the impact of STW participation on the subsequent labour market status of workers.