Active Labour Market Policies and Short-Time Work Arrangements: Evidence from a Survey of Luxembourg Firms

51 Pages Posted: 4 Jul 2017

See all articles by Konstantinos Efstathiou

Konstantinos Efstathiou

Bruegel

Thomas Y. Mathä

Banque centrale du Luxembourg

Cindy Veiga Nunes

Banque Centrale du Luxembourg

Ladislav Wintr

Banque Centrale du Luxembourg

Date Written: June 29, 2017

Abstract

We analyse the use of active labour market policy (ALMP) measures and short-time work arrangements (STWAs) by Luxembourg firms during the years of economic and financial crisis (2008-09) and the subsequent European sovereign debt crisis (2010-13). About 34% of Luxembourg firms used ALMPs between 2008 and 2013. Economy-wide, use of ALMPs increased along both the extensive margin (more firms) and the intensive margin (more measures per firm). The likelihood that a firm hired with recourse to ALMPs is greater for large, domestically oriented, multiple establishment firms, firms facing strong demand, with concerns about labour cost pressures and unavailability of skilled labour. The crisis saw a surge in firms using STWAs. The likelihood of applying for STWAs increases with demand volatility, the share of workers with permanent contracts, export orientation and the inability to shift workers between establishments. Firms reported that 20-25% of jobs in STWAs were saved by this measure.

Keywords: Firms, Survey, Crisis, Active Labour Market Policy, Short-Time Work Arrangements

JEL Classification: C25, J63, J68

Suggested Citation

Efstathiou, Konstantinos and Mathä, Thomas Y. and Veiga Nunes, Cindy and Wintr, Ladislav, Active Labour Market Policies and Short-Time Work Arrangements: Evidence from a Survey of Luxembourg Firms (June 29, 2017). ECB Working Paper No. 2083. Available at SSRN: https://ssrn.com/abstract=2995419

Konstantinos Efstathiou

Bruegel ( email )

Rue de la Charité 33
B-1210 Brussels Belgium, 1210
Belgium

Thomas Y. Mathä (Contact Author)

Banque centrale du Luxembourg ( email )

2, bd Royal
L-2983 Luxembourg
Luxembourg
+352 4774 4270 (Phone)
+352 4774 4920 (Fax)

Cindy Veiga Nunes

Banque Centrale du Luxembourg ( email )

2, boulevard Royal
Luxembourg, L-2983
Luxembourg

Ladislav Wintr

Banque Centrale du Luxembourg ( email )

2, boulevard Royal
Luxembourg, L-2983
Luxembourg

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