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Employment dynamics across firms during COVID-19: The role of job retention schemes

Author

Listed:
  • Sara Calligaris
  • Gabriele Ciminelli
  • Hélia Costa
  • Chiara Criscuolo
  • Lilas Demmou
  • Isabelle Desnoyers-James
  • Guido Franco
  • Rudy Verlhac

Abstract

This paper analyses employment dynamics across firms during the COVID-19 pandemic and the role of job retention schemes (JRS) in shaping these dynamics. It relies on a novel collection of high-frequency harmonised micro-aggregated statistics, computed using administrative data on employment and wages from electronic payroll records across 12 countries linked to monthly information on policy support during COVID-19, as well as on a new indicator of JRS de-jure generosity. The analysis highlights four key findings: i) the employment adjustment margins varied over time, adjusting mainly through the intensive margin in 2020, while both the intensive and the extensive margins contributed to employment changes in 2021; ii) the reallocation process remained productivity enhancing, although to a lower extent on average compared to 2019; iii) JRS were successful in their purpose of cushioning the effect of the crisis on employment growth and firm survival; iv) JRS support did not distort the productivity-enhancing nature of reallocation.

Suggested Citation

  • Sara Calligaris & Gabriele Ciminelli & Hélia Costa & Chiara Criscuolo & Lilas Demmou & Isabelle Desnoyers-James & Guido Franco & Rudy Verlhac, 2023. "Employment dynamics across firms during COVID-19: The role of job retention schemes," OECD Economics Department Working Papers 1788, OECD Publishing.
    • Handle: RePEc:oec:ecoaaa:1788-en
    DOI: 10.1787/33388537-en
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    More about this item

    Keywords

    COVID-19; Employment dynamics; Job retention schemes; Productivity; Reallocation;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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