Temporary layoffs, short-time work and COVID-19: the case of a dual labour market

  1. Victoria Osuna 1
  2. José Ignacio García Pérez 1
  1. 1 Universidad Pablo de Olavide

    Universidad Pablo de Olavide

    Sevilla, España

    ROR https://ror.org/02z749649

Applied economic analysis

ISSN: 2632-7627

Year of publication: 2022

Volume: 30

Issue: 90

Pages: 248-262

Type: Article

More publications in: Applied economic analysis


JCR (Journal Impact Factor)

(Indicator corresponding to the last year available on this portal, year 2021)
  • Year 2021
  • Journal Impact Factor: 1.042
  • Journal Impact Factor without self cites: 1.042
  • Article influence score: 0.185
  • Best Quartile: Q4
  • Area: ECONOMICS Quartile: Q4 Rank in area: 316/381 (Ranking edition: SSCI)

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(Indicator corresponding to the last year available on this portal, year 2021)
  • Year 2021
  • SJR Journal Impact: 0.333
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  • Area: Economics, Econometrics and Finance (miscellaneous) Quartile: Q2 Rank in area: 164/416

Índice Dialnet de Revistas

(Indicator corresponding to the last year available on this portal, year 2021)
  • Year 2021
  • Journal Impact: 0.130
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  • Social Sciences: B

Scopus CiteScore

(Indicator corresponding to the last year available on this portal, year 2021)
  • Year 2021
  • CiteScore of the Journal : 1.2
  • Area: Economics, Econometrics and Finance (all) Percentile: 53

Journal Citation Indicator (JCI)

(Indicator corresponding to the last year available on this portal, year 2021)
  • Year 2021
  • Journal Citation Indicator (JCI): 0.28
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Purpose This paper aims to study the type of short-time work (STW) schemes implemented in Spain to preserve jobs and workers’ incomes during the COVID-19 crisis and the corresponding labour market outcomes. Design/methodology/approach A dynamic macroeconomic model of job creation and destruction of the search and matching type in a dual labour market. Findings The model shows that the availability of STW schemes does not necessarily prevent a large increase in unemployment and job destruction. The quantitative effects depend on the degree of subsidization of payroll taxes and on the design of the policy. A scenario with a moderate degree of subsidization and where the subsidy is independent of the reduction in hours worked is the least harmful for both welfare and fiscal deficit. The cost of such a strategy is a higher unemployment rate. Concerning heterogeneous effects, the unemployed are the ones who experience the strongest distributional changes. Originality/value The effectiveness of STW schemes in dual labour markets using a search and matching model in the context of the COVID-19 crisis has not been analysed elsewhere. The literature has emphasized the importance of dynamics, labour market institutions and workers’ heterogeneity to understand workforce adjustment decisions in the face of temporary shocks to de- mand especially when firms’ human capital is relevant. These elements are present in the model. In addition, this paper computes welfare and distributional effects and the cost of these policies.

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