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The use of short-time working during the health crisis and its effects

Laurent Bach, Thomas Breda, Nicolas Ghio, Léa Toulemon, Paul Dutronc-Postel, Clément Malgouyres
December 2022
This report places the characteristics of the French short-time working scheme in an international context and examines the issue of moral hazard posed by an insurance-based scheme such as short-time working. This report describes the uptake of the short-time working scheme during 2020 and examines the factors influencing this uptake at both firm and individual level.
Reference IPP Report No. 39

Quote this publication

(December 2022). ‘The use of short-time working during the health crisis and its effects’, IPP Report, No. 39. The Institut des politiques publiques (IPP).
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Presentation

On an unprecedented scale, the short-time working scheme was one of the main tools used by the government to support firms and keep employees in their jobs, particularly during the first lockdown in the second quarter of 2020, at the height of the public health restrictions introduced to combat the Covid-19 pandemic. A quarter of the workforce was thus on short-time working, and over the course of 2020 as a whole, 55 per cent of establishments made use of the scheme for at least some of their employees.

This report analyses, in three distinct sections, the arrangements, determining factors and consequences of the use of short-time working.

Key Results

  • Beyond a very strong sector-specific dimension, it is the factors facilitating the possibility of working from home that account for a very significant proportion of the use (or non-use) of short-time working.
  • The importance of digital tools in a firm’s operations, and employees’ access to a good internet connection at home, had complementary and very pronounced negative effects on the use of short-time working during the first lockdown.
  • Symmetrical effects are observed in the use of remote working. This appears to have become at least partly self-sustaining during the second lockdown, when health measures were less restrictive.
  • Shocks to international demand had a very significant and consistent effect over the period, in contrast to shocks related to supply chains. The latter, which were much smaller in scale, appear to have played a role only during the summer of 2020.
  • Greater use of short-time working appears to have a negative effect on new hires and on firms’ turnover growth in the months that follow, and does not appear to be associated with a reduction in insolvencies. This finding would require a longer time horizon and additional data to be confirmed.
Last modified: July 21, 2026