Short-Time Compensation as a Policy to Stabilize Employment

Research Report

Short-Time Compensation as a Policy to Stabilize Employment

November 19, 2009

Abstract

Short time compensation (STC or work sharing) is a labor adjustment measure designed to reduce or eliminate reliance on layoffs when firms need to reduce hours worked. It spreads the reduction in hours among a wide pool of workers and provides partial unemployment compensation (UC) for the reduced hours. This paper examines STC with attention to experiences in Canada and Germany as well as the United States. It also suggests ways to increase STC use in the United States.

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