Employment dynamics across firms during COVID-19
The role of job retention schemes
This paper analyses employment dynamics across firms during the COVID-19 pandemic
and the role of job retention schemes (JRS) in shaping these dynamics. It relies on
a novel collection of high-frequency harmonised micro-aggregated statistics, computed
using administrative data on employment and wages from electronic payroll records
across 12 countries linked to monthly information on policy support during COVID-19,
as well as on a new indicator of JRS de-jure generosity. The analysis highlights four
key findings: i) the employment adjustment margins varied over time, adjusting mainly
through the intensive margin in 2020, while both the intensive and the extensive margins
contributed to employment changes in 2021; ii) the reallocation process remained productivity
enhancing, although to a lower extent on average compared to 2019; iii) JRS were successful
in their purpose of cushioning the effect of the crisis on employment growth and firm
survival; iv) JRS support did not distort the productivity-enhancing nature of reallocation.
Published on December 21, 2023
In series:OECD Economics Department Working Papersview more titles