While the US aggressively extended generosity of unemployment insurance in the face of the Covid-19 pandemic, Europe heavily subsidised reductions in hours worked and temporary layoffs through short-time work or similar schemes. This column presents a framework for determining the relative welfare costs and benefits of the two labour market policies during economic downturns. In countries with already generous unemployment insurance and/or strong employment protection, like those in Europe, strong cyclical short-time work programmes can be an extremely valuable complement to unemployment insurance to respond to recessions.

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12 November 2021

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VoxEU

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https://voxeu.org/article/social-insurance-policies-turbulent-times-short-time-work-versus-unemployment-insurance

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