CAHIER D’ÉTUDES WORKING PAPER N° 110 ACTIVE LABOUR MARKET POLICIES AND SHORT-TIME WORK ARRANGEMENTS: EVIDENCE FROM A SURVEY OF LUXEMBOURG FIRMS KONSTANTINOS EFSTATHIOU THOMAS Y. MATHÄ CINDY VEIGA LADISLAV WINTR JUNE 2017 2, boulevard Royal L-2983 Luxembourg Tél.: +352 4774-1 Fax: +352 4774 4910 www.bcl.lu •
[email protected] CAHIER D’ÉTUDES WORKING PAPER N° 110 ACTIVE LABOUR MARKET POLICIES AND SHORT-TIME WORK ARRANGEMENTS: EVIDENCE FROM A SURVEY OF LUXEMBOURG FIRMS KONSTANTINOS EFSTATHIOU THOMAS Y. MATHÄ CINDY VEIGA LADISLAV WINTR JUNE 2017 Active labour market policies and short-time work arrangements: Evidence from a survey of Luxembourg firms Konstantinos Efstathiou Thomas Y. Mathä
[email protected] [email protected] Cindy Veiga Ladislav Wintr
[email protected] [email protected] June 2017 Abstract: We analyse the use of active labour market policy (ALMP) measures and short-time work arrangements (STWAs) by Luxembourg firms during the years of economic and financial crisis (2008-09) and the subsequent European sovereign debt crisis (2010-13). About 34% of Luxembourg firms used ALMPs between 2008 and 2013. Economy-wide, use of ALMPs increased along both the extensive margin (more firms) and the inten- sive margin (more measures per firm). The likelihood that a firm hired with recourse to ALMPs is greater for large, domestically oriented, multiple establishment firms, firms facing strong demand, with concerns about labour cost pressures and unavailability of skilled labour. The crisis saw a surge in firms using STWAs. The likelihood of applying for STWAs increases with demand volatility, the share of workers with permanent con- tracts, export orientation and the inability to shift workers between establishments.