Short-time work in the Great Recession: firm-level evidence from 20 EU countries

Table 7 The effect of STW usage on the propensity to lay off workers

Dependent variable	(1) Reduce permanent	(2) Reduce temporary
Collective layoffs	0.0956*** (0.0476)	0.0631*** (0.0133)
Individual layoffs	0.0861*** (0.0127)	0.0247*** (0.0150)
Temporary layoffs	− 0.0122 (0.0129)	0.0156 (0.0170)
Subsidised reduction of working hours (STW)	−0.0529*** (0.0148)	−0.0176 (0.0170)
Non-subsidised reduction of working hours	− 0.0172 (0.0108)	− 0.0300** (0.0135)
Non-renewal of temporary contracts	− 0.0126 (0.0106)	0.1722*** (0.0177)
Early retirement schemes	0.0389*** (0.0120)	0.0210 (0.0140)
Freeze or reduction of new hires	0.0677*** (0.0111)	0.0238* (0.0136)
Reduction of agency workers and others	0.0262** (0.0103)	0.0701*** (0.0132)
Firm and worker characteristics	Yes	Yes
Sector and size dummies	Yes	Yes
Observations	5508	5508
% firms that laid-off workers	56%	33%

Unweighted average marginal effects reported. The first stage regressors are identical to those of specification (4) in Table 3. Country, sector and size fixed effects included. The second stage includes (not reported) the firm-specific controls hiring and firing costs, collective pay agreement, skill-level (2) and tenure, sector and size fixed effects. Standard errors clustered by country, sector and size in parentheses. ***p < 0.01, **p < 0.05, *p < 0.1