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Working Time Accounts and Turnover *
Author(s) -
Launov Andrey
Publication year - 2021
Publication title -
the scandinavian journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.725
H-Index - 64
eISSN - 1467-9442
pISSN - 0347-0520
DOI - 10.1111/sjoe.12430
Subject(s) - economics , recession , bookkeeping , unemployment , working hours , labour economics , working time , aggregate demand , monetary economics , macroeconomics , work (physics) , finance , monetary policy , mechanical engineering , engineering
Working time accounts are essentially bookkeeping tools that allow firms to smooth their demand for hours employed. Descriptive literature suggests that working time accounts can reduce layoffs and inhibit increases in unemployment during recessions. In a model of optimal labor demand, I show that working time accounts do not necessarily guarantee fewer layoffs at the firm level. Layoffs can fall or rise depending on whether a firm meets an economic downturn with a surplus or a deficit of hours, and on how productive the firm is. On aggregate and in expected terms, however, working time accounts reduce job destruction.

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