Research

Publications

• Should We Insure Workers or Jobs During Recessions? (with Giulia Giupponi and Camille Landais)
Journal of Economic Perspectives 36(2): 29-54, 2022. Online Appendix
Working Paper
CEPR Discussion Paper No. 16421
In the media: VoxEu

[Abstract]

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.

Working Paper

• Firm Moral Hazard in Short-Time Work (Available upon request)

Abstract: Short-time work (STW) programs held a central stage in the policy response to the pandemic in Europe, subsidizing temporary reductions in hours worked. STW main objectives are to stabilize employment and provide insurance to workers (and firms). But, as any social insurance program, it may trigger moral hazard responses, the nature and extent of which has been largely under explored in the literature. This papers intends to quantify behavioral responses to STW in the context of France during the pandemic. Using exhaustive establishment-level and worker-level data on STW take-up and quasi-experimental variation in employer contributions to the program, I study two types of behavioral responses: (i) misreporting and (ii) changes in real economic behavior. I document bunching around a discontinuity in employer's STW costs along the wage distribution which is revealing of a pure reporting response. Using variation in employer contributions across industries, I quantify a misreporting response as well as real labor demand adjustments.

Selected Work in Progress

• Employed In-house or Outsourced - Where Do Workers in Services Stand?
• Firm Expectations and Labor Demand

Policy Work and Other Writing

• Giupponi, G., C. Landais and A. Lapeyre (2022) “Unemployment Insurance versus Short-Time Work: What Should Governments Do?”, 2022 LERA Perspectives on Work