Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/314554 
Year of Publication: 
2025
Series/Report no.: 
IZA Discussion Papers No. 17657
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Short-time work (STW) has been widely used, both during the Great Recession and the COVID crisis, to preserve jobs. In most European countries, the implementation of STW schemes is often the result of bargaining between trade unions and employers, yet very little is known about the role of unions. In this paper, we investigate the effects of STW schemes on a number of firms' economic outcomes, considering the role of unions and collective bargaining. We use firm-level panel data, for the metal--engineering industry (from 2009 to 2015), with information on firms characteristics, STW use, industrial relations attributes, merged with accounting data. We estimate the elasticity of employment, working hours, wages and labour productivity to STW hours using an IV-FE estimator. We find that STW is an effective policy to preserve jobs in all firms. The positive effect on employment is supported by quite different mechanisms, which depend on unions presence and power in the firm. In low unionized firms wage cuts are the prevailing adjustment mechanisms, while in highly unionized firms, per-capita wages are insensitive to STW and adjustment mainly occurs through a reduction in working hours. These results are coherent with the use of STW as a work sharing device to protect incumbent workers who are mainly union members.
Subjects: 
short-time work
employment
wages
labour productivity
unions
JEL: 
J08
J38
J58
Document Type: 
Working Paper

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