The Effect of Working Time Reduction on Short-Time Compensation: a French Empirical Analysis

Oana Calavrezo (1) , Richard Duhautois (2, 3) , Emmanuelle Walkowiak (2, 3, 4)

1 LEO - Laboratoire d'économie d'Orleans [2008-2011]
2 CEE - Centre d'études de l'emploi
3 ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique
4 TEPP - Travail, Emploi et Politiques Publiques

The short-time compensation (STC) program aims to avoid lay-offs in case of short-term downturns. According to insurance models, STC is an instrument of both job security and flexibility. This paper investigates the impact of workweek reduction to 35 hours on the French STC recourse. We quantify the average decrease in the STC authorized days with kernel matching estimators assessed on a balanced panel of French establishments. We highlight a substitution effect between STC and working time reduction (WTR) due to their internal flexibility role. As a consequence, the WTR policy refocused STC on its initial job security function.

Domaines: Economies et finances

Oana Calavrezo, Richard Duhautois, Emmanuelle Walkowiak. The Effect of Working Time Reduction on Short-Time Compensation: a French Empirical Analysis. 2007. ⟨hal-00831543⟩