Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/278080 
Year of Publication: 
2023
Citation: 
[Journal:] Journal for Labour Market Research [ISSN:] 2510-5027 [Volume:] 57 [Issue:] 1 [Article No.:] 17 [Year:] 2023 [Pages:] 1-9
Publisher: 
Springer, Heidelberg
Abstract: 
This paper presents an average treatment effect analysis of Spain's furlough program during the onset of the COVID-19 pandemic. Using 2020 labour force quarterly microdata, we construct a counterfactual made of comparable nonfurloughed individuals who lost their jobs and apply propensity score matching based on their pretreatment characteristics. Our findings show that the probability of being re-employed in the next quarter significantly increased for the treated (furlough granted group). These results appear robust across models, after testing a wide range of matching specifications that reveal a reemployment probability premium of near 30 percentage points in the group of workers who had been furloughed for a single quarter. Nevertheless, a different time arrangement affected the magnitude of the effect, suggesting that it may decrease with the furlough duration. Thus, an analogous analysis for a longer (two quarter) scheme estimated a still positive but smaller effect, approximately 12 percentage points. Although this finding might alert against long lasting schemes under persistent recessions, this policy still stands as a useful strategy to face essentially transitory adverse shocks.
Subjects: 
Furlough
Short-time work
ERTE
Propensity score matching
COVID-19
Spain
JEL: 
J08
J38
J65
J68
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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