Short-time work in Luxembourg: evidence from a firm survey

We analyse the use of short-time work (STW) by Luxembourg firms during the years of economic and financial crisis (2008–2009) and the subsequent European sovereign debt crisis (2010–2013). The economic and financial crisis saw a surge in the number of firms using short-time work. We find that the likelihood that a firm applied for or used short-time work increases with demand volatility, the degree of firm-specific human capital and is higher for firms that cannot shift workers between establishments or that are more export oriented. Firms reported that 20–25% of jobs in short-time work were saved by this measure.