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 SHORT-TIME WORK AND RELATED MEASURES TO MITIGATE THE CONSEQUENCES OF A (PARTIAL) ECONOMIC SHUTDOWN
IDEA 2020
Implementation Frictions
Depend on design.
Usually low because existing systems can be extended or used.
High:
 Table 2: Comparison of Key Measures
            Short-time work
Unemploy- ment Insurance
Means- tested programs
Universal transfers
Loans
Short-term Adjustment costs
Low by preserving jobs and supporting businesses
High:
- employer-employee relations lost
- eligibility checks often deter quick take-up
High:
- eligibility checks and bureaucracy
- imperfect take-up due to stigma or complex rules
- inefficient targeting without complex rules
Low due to its universal nature, but transfers often too low for most recipients
- Very low if taken up by those in need
- bureaucracy, eligibility and repayment often deter take-up, potentially leading to no or harmful effects
Long-term Adjustment costs
Ambiguous: high where they deter adjustment, low where they preserve jobs and businesses
High:
- prolong unemployment
- employers may face difficulties rehiring workers
- persistent wage losses
High:
- low incentives to adapt
- low incentives for job search can harm recovery
- welfare participation is persistent
Likely low, though free handouts and including the better off can have negative effects.
- High if they create problems with repayment
- Low if waived to stimulate recovery skillfully
- implementation and expectations crucial for long- term costs
Policy Costs
Potential for excessive use, but lower than unemployment insurance
When short-time work is available, unemployment insurance is strictly more costly due to the reduction to zero hours and no employer contribution
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Generous programs are costly due to the high subsidy and likely high take-up.
Small transfers are cheap, but can only deliver emergency relief
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eligibility checks cause bureaucratic costs and low take- up.
Can be mitigated by using available records for quick eligibility checks.
 Extremely high due to absence of any targeting.
Low unless repayment rates are very low
Very low.
Depends on administration, simplicity comes at the expense of low repayment rates and potential for fraud
       Note: Preliminary, corrections/additions appreciated. We will try to add references in a table note.
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