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Workshare to the Rescue: Using Flexible Employment Strategies to Counter Economic Crises

Paper Session

Sunday, Jan. 9, 2022 12:15 PM - 2:15 PM (EST)

Hosted By: Labor and Employment Relations Association
  • Chair: Katharine Abraham, University of Maryland

From the U.S. Epicenter: How Washington State's Workshare Worked

Heather Grob
Saint Martin's University


Washington was among the states that used work sharing relatively heavily during the pandemic recession. This presentation will consider the factors that contributed to the relative success Washington experienced.

Options for Avoiding Costly Job Losses during Recessions: Work Sharing versus UI in California

Till M. von Wachter
University of California-Los Angeles


In contrast to Washington, very few California employers adopted work sharing plans during the pandemic. This presentation will present new data on the use of work sharing in California and contrast the California experience with that in other states. The author also will consider steps that might be taken to increase the use of work sharing in future recessions, perhaps as part of a more global reform of the nation's unemployment insurance system.

STC Use in the United States: Addressing Barriers and Recognizing Limitations

Susan Houseman
W.E. Upjohn Institute for Employment Research


This presentation will report on results from a demonstration project carried out in Iowa and Oregon following the Great Recession to determine employer awareness of those states’ workshare programs and assess the effects of efforts to raise employer awareness on program usage. Modest investments in program advertising significantly increased employer awareness of the program and, in Oregon, led to significant increases in program usage. Drawing on this research as well as more recent interviews with employers and program officials in several states, the author will discuss the potential barriers to U.S. employers’ use of work sharing during the pandemic and discuss how these might be addressed.

Should We Insure Workers or Jobs During Recessions?

Giulia Giupponi
Bocconi University
Camille Landais
London School of Economics
Alice Lapeyre


What is the most efficient way to respond to recessions in the labor market? To this question, policymakers on both sides of the pond gave two diametrically opposed answers during the recent crisis. In the US, the focus was on insuring workers, by aggressively increasing the generosity of unemployment insurance. In Europe, to the contrary, policies were concentrated on saving job matches, with the massive use of labor hoarding subsidies through short-time work programs, on which so little is actually known. So who got it right? Should we insure workers or jobs during recessions? In this article, we show that far from being substitutes, unemployment insurance and short-time-work policies exhibit strong complementarities. They provide insurance to different types of workers, and against different types of shocks. Short-time-work can be an effective way to reduce socially costly layoffs against large temporary shocks but is less effective against more persistent shocks that require reallocation across firms and sectors. Overall, we conclude that short-time-work is an important and useful addition to the labor market policy-toolkit during recessions, which should be used alongside unemployment insurance.
JEL Classifications
  • J1 - Demographic Economics
  • J8 - Labor Standards: National and International