Natalia Bermúdez - Barrezueta

(IRES/LIDAM, UCLouvain)

will give a presentation on 

Protecting Jobs and Firms: The Impact of Short-Time Work during COVID-19

Abstract

Short-Time Work (STW) programs aim to protect jobs and firms, but their pandemic effectiveness remains unclear. This paper evaluates STW during COVID-19, a period marked by economic lockdowns and high STW uptake. Using a fuzzy regression discontinuity design, I exploit a Belgian policy change that limited STW access to firms that had not used the program for at least 20% of contractual days at the peak of the crisis. Results show that STW effectively preserved jobs in firms with workers in protected sectors, those directly impacted by lockdown measures, but had no significant effect on firms with workers in non-protected sectors, indicating deadweight losses. These heterogeneous responses align with existing STW theoretical predictions, where the program is found to be more effective for firms with the largest (unexpected) productivity shocks.