Short‐Time Compensation as a Tool to Mitigate Job Loss? Evidence on the U.S. Experience During the Recent Recession

25 Pages Posted: 23 Sep 2014

See all articles by Katharine G. Abraham

Katharine G. Abraham

University of Maryland - Joint Program in Survey Methodology and Department of Economics; National Bureau of Economic Research (NBER)

Susan N. Houseman

W.E. Upjohn Institute for Employment Research

Date Written: October 2014

Abstract

During the recent recession only seventeen states offered short‐time compensation (STC) - prorated unemployment benefits for workers whose hours are reduced for economic reasons. Federal legislation passed in 2012 will encourage the expansion of STC. Exploiting cross‐state variation in STC, we present new evidence indicating that jobs saved during the recession as a consequence of STC may have been significant in manufacturing, but that the overall scale of the STC program was generally too small to have substantially mitigated aggregate job losses in the seventeen states. Expansion of the program is necessary for STC to be an effective countercyclical tool in the future.

Suggested Citation

Abraham, Katharine G. and Houseman, Susan N., Short‐Time Compensation as a Tool to Mitigate Job Loss? Evidence on the U.S. Experience During the Recent Recession (October 2014). Industrial Relations: A Journal of Economy and Society, Vol. 53, Issue 4, pp. 543-567, 2014, Available at SSRN: https://ssrn.com/abstract=2499924 or http://dx.doi.org/10.1111/irel.12069

Katharine G. Abraham (Contact Author)

University of Maryland - Joint Program in Survey Methodology and Department of Economics ( email )

College Park, MD 20742
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Susan N. Houseman

W.E. Upjohn Institute for Employment Research ( email )

300 South Westnedge Avenue
Kalamazoo, MI 49007-4686
United States

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