Title page
Contents
Abstract/Résumé 4
1. Introduction 8
2. Data collection: new micro-aggregated data and a new policy indicator 11
2.1. New data on employment dynamics using a distributed microdata approach 11
2.2. A new cross-country indicator of JRS de jure generosity 13
2.3. Indicators on the intensity of the COVID-19 shock and sectoral exposure 14
3. Employment dynamics and productivity-enhancing reallocation during the COVID-19 crisis 15
3.1. The intensive and extensive margins of employment growth 15
3.2. Reallocation and productivity 18
4. Job retention schemes: policy design and uptake across countries and sectors 21
4.1. De jure generosity of job retention schemes 22
4.2. Uptake of job retention schemes 22
5. Job retention schemes and employment: a mitigation role 26
5.1. Employment dynamics of supported vs non-supported firms 27
5.2. The impact of JRS on employment growth: a cross-country comparison 30
6. Job retention schemes and productivity: mitigating the impact of the crisis without distorting the reallocation process 34
6.1. Who took the support? Allocation along the productivity and size distribution 34
6.2. Employment dynamics of supported vs non-supported firms: does productivity matter? 36
6.3. The role of JRS for productivity-enhancing reallocation 39
References 41
Annex A. Micro-aggregate data collection 45
Country teams 45
Data requirements to run the decentralised STATA routine 45
Variables definition 46
Data preparation 48
Basic consistency checks 48
Data cleaning and preparation 48
Resulting micro-aggregated datasets 50
Annex B. Job retention schemes in COVID-19 times: a cross-country database 53
Eligibility requirements 53
Provisions related to financial aid 54
Annex C. Additional figures 56
Annex D. Additional tables 60
Table 1. Summary of data availability across countries 13
Figure 1. Within-sector employment dynamics and survival rates during the crisis 17
Figure 2. Employment growth and firms' survival rate during the crisis varied markedly across countries 18
Figure 3. Productivity-enhancing reallocation took place in 2019 but weakened during the crisis 20
Figure 4. Reallocation of labour from least to most productive firms across countries 21
Figure 5. De-jure generosity of COVID-19 related job retention schemes across countries and over time 22
Figure 6. Job retention schemes: uptake across countries and over time 23
Figure 7. Actual JRS uptake is positively correlated with the stringency of containment measures and the de-jure generosity of JRS 24
Figure 8. Job retention schemes: generosity across countries and over time 24
Figure 9. Job retention schemes uptake across sectors 25
Figure 10. Direct subsidies and loan facilities uptake 26
Figure 11. Firms that received support through JRS exited the market less than those that did not, with differences across countries 28
Figure 12. After 12 months firms taking up support generally displayed significantly lower employment growth than non-uptakers 29
Figure 13. JRS contributed to employment preservation in more exposed sectors 31
Figure 14. JRS preserved jobs, particularly in most exposed sectors 32
Figure 15. JRS prevent job destruction and have no significant effects on job creation 33
Figure 16. The impact of JRS on exit rates 33
Figure 17. Uptake was lower for (very) low-productivity firms 35
Figure 18. Uptake was higher for medium-sized firms 36
Figure 19. JRS uptake status affected firms differently along the extensive margin across productivity groups 38
Figure 20. JRS design and exit rates in Australia before and after JRS withdrawal 39
Figure 21. JRS may have weakened reallocation but not productivity 40
Boxes
Box 1. The COVID-19 crisis, employment, and policies 11
Box 2. Direct subsidies, loan and moratorium facilities: an overview 25
Box 3. JRS: a temporary freeze of cleansing? Evidence from Australia 39
Annex Tables
Table A.1. Members of country teams 45
Table A.2. Dimensions for data aggregation 50
Table A.3. Collected output files 51
Table A.4. Number of firms and firm average employment, by country and wage quantile 52
Table D.1. The crisis impacted employment growth through the intensive margin 60
Table D.2. The crisis impacted sectors differently depending on their ability to telework 61
Table D.3. Employment and survival rates across countries 62
Table D.4. Within-year labour reallocation 63
Table D.5. Employment reallocation became less productivity enhancing in 2020 64
Table D.6. Productivity-enhancing reallocation before and during COVID-19 65
Table D.7. Survival and employment growth by JRS uptake status 66
Table D.8. Survival by uptake by country 67
Table D.9. Survival and employment growth differences by productivity quantile 68
Annex Figures
Figure B.1. De-jure JRS indicator: Eligibility requirements across countries 54
Figure B.2. De-jure JRS indicator: Provisions related to financial aid across countries 55
Figure C.1. Policy uptake has been significantly lower in less exposed (high telework) sectors 56
Figure C.2. Survival rates by country and JRS uptake status 56
Figure C.3. High productivity firms relative uptake was the highest in most exposed sectors 57
Figure C.4. JRS uptake at least once, by productivity quantile 58
Figure C.5. Average pre-COVID-19 firm size by uptake status 58
Figure C.6. Survival rates by country, productivity quantile and JRS uptake status 59
Figure C.7. Reallocation of labour across sectors during the COVID-19 crisis 59