Research

Working papers

Theory and Empirics of Short-Time Work: A Review, with Natalia Bermúdez & Muriel Dejemeppe [IRES/LIDAM WP - Forthcoming at Economie et Statistique/Economics and Statistics]

Following massive take-up rates during the COVID-19 period, short-time work (STW) policies have attracted renewed interest. In this paper, we take stock of this policy instrument and provide a critical review of STW systems in Europe. We focus on the objectives of STW programs and their primary characteristics, as well as the inefficiencies associated with these policies, such as excessive use and slower worker reallocation. Additionally, we take a stroll through the main contributions of STW impact evaluations. Finally, we identify relevant directions for the refinement of the main design features of the scheme, key lessons, and avenues for future research.

Hiring Subsidies and Temporary Work Agencies, with Natalia Bermúdez & Sam Desiere - [IZA WP - Revisions Requested at Labour Economics]

This paper evaluates a hiring subsidy for lower-educated youths in Flanders (Belgium) that reduced labour costs by approximately 13% for a period of two years, starting in 2016. Using a donut Regression Discontinuity Design, we find no evidence that the subsidy improved the job finding rate of eligible job seekers in 2016-19, a period marked by a tight labour market. We then investigate the role of temporary work agencies, which disproportionately employ the target group and obtain 25% to 34% of the subsidies. Using Difference-in-Differences regressions, we demonstrate that agencies did not raise wages of eligible agency workers in response to the policy. Remarkably, despite a 3.3% labour cost reduction, full-time equivalent employment of eligible workers in these agencies decreased by 9.2% over the three years following the reform. Our findings highlight how an active labour market policy affects agency employment.

Presented at: Belgian Day of Labour Economists (2023), ESPE (2024), EEA-ESEM (2024)

Works in progress

Experience Rating in Short-Time Work, with Bart Cockx & Jaco De Bacquer [Draft available upon request]

A central labour market policy response to both the Great Recession and the COVID-19 crisis, short-time work (STW) is a government program that subsidises reductions in working hours to prevent layoffs in firms experiencing temporary shocks. However, by providing financial support for reduced working time, STW inherently creates incentives for excessive take-up absent financial disincentives. This paper examines two reforms of the Belgian STW system, implemented in 2005 and 2012, which introduced firm-level taxes on individual workers’ STW take-up to mitigate distortions in working hours and covering about 15% of firms in STW. Drawing on employer-employee longitudinal data and bunching designs, we provide novel evidence that both reforms resulted in a significant decline in STW for individual workers, primarily impacting jobs at the top of the wage bill distribution. Additionally, we identify a dynamic sequence of significant but short-lived firm-level co-worker spillovers. After the reform, firms downscaled STW intensity for individual workers to share the STW working time reduction with a wider pool of co-workers. These effects are rationalised by a search and matching model featuring idiosyncratic productivity shocks and an institutional setting with downward wage rigidity, firing costs, and financial experience-rated taxes in STW provision. These behavioural adjustments generate fiscal savings of 5% for every euro invested in STW.

Presented at: PSE European Doctoral Program Jamboree (2023), Italian Association of Labour Economics (2023), Belgian Day of Labour Economics (2023), Internal Seminar Series 2023 (UGent), Research Day 2023 (UGent), Sciences Po Public/Labour Reading Group (2024), IIPF (2024), EALE (2024), National Bank of Belgium (2025), Competence Centre Microeconometric Evaluation (EU - JRC - Ispra), ESPE (2025), Simposio de la Asociación Española de Economía, ZEW Mannheim

Grants: PhD Student Grant by Fundación Ramón Areces & Spanish Economic Association 2025

Shortlisted for: PhD Prize from European Society of Population Economics 2025

Greenness of Employment: Regional Heterogeneity and Labor Market Outcomes