Designing short-time work insurance : the impact of financial incentives
(2025)
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; Cockx, Bart- Abstract
- Understanding how firms respond to labor-market interventions is crucial for designing effective job-protection policies. While the design of unemployment insurance has been extensively studied, much less is known about the design of Short-Time Work (STW) schemes—publicly funded programs that subsidize temporary reductions in working hours to prevent layoffs during economic shocks. This thesis examines how employer-borne financial incentives in STW insurance influence firms’ reliance on the program, their employment strategies, and financial and wage outcomes. It assesses whether such incentives can curb intensive use—defined as the number of STW days per worker—without undermining STW’s stabilizing role. The analysis exploits two Belgian reforms (2005 and 2012) that introduced financial incentives targeting the intensive margin of STW use. It draws on worker- and firm-level data and applies bunching estimators and Regression Kink Designs to identify causal effects. Chapter 1 reviews the literature on STW, highlighting its role as a labor-market stabilizer and the potential for monitoring and financial incentives to improve its design. Chapter 2 studies whether these financial incentives reduce STW intensity per worker and redistribute working-time reductions across a broader base of employees. Chapter 3 explores their broader effects on employment, wages, and firm performance, shedding light on the trade-offs inherent in designing employer-borne financial incentives.
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Tarullo, G. (2025). Designing short-time work insurance : the impact of financial incentives [Elsevier BV]. https://hdl.handle.net/2078.5/276840