As part of its responses to the COVID-19 crisis, the OECD has recently released a new policy brief, Job retention schemes during the COVID-19 lockdown and beyond.

Key findings

During the early stage of the COVID‑19 crisis, countries have acted decisively to save jobs by scaling up existing job retention schemes or introducing new ones. Across the OECD, they supported over 50 million jobs, ten times as many as during the global financial crisis of 2008-09. In most countries, these schemes allow firms to adjust working hours at zero costs, greatly reducing the number of jobs at risk of termination as a result of liquidity constraints and preventing a surge in unemployment. Moreover, JR schemes tend to provide stronger support than unemployment benefits to workers who are temporarily not working, mitigating financial hardship for many workers and supporting aggregate demand.

Going forward, job retention schemes need to adjust their focus to targeting jobs that are likely to be viable in the short- to medium-term and may also need to be differentiated between sectors whose activity remains legally curtailed and those where activity is resuming. Governments have a number of levers that they can use to adapt support as they start re-opening their economic sectors:

  • Require firms to contribute to the costs of hours not worked. This strengthens incentives to use subsidies for jobs that are viable after the crisis and to increase working hours as soon as possible. Top-ups may be set to increase the hourly rate for hours not worked or to ensure a minimum level of income.
  • Job retention support should be time-limited, but limits should not be set in stone. Time-limits reduce the risk of supporting jobs that are no longer viable even in the longer term. However, time-limits should not be set in stone as they may need to adjust according to the health and economic situation.
  • Align short-time work and unemployment benefits more closely in countries where the gap is large. This can strengthen incentives for workers to resume normal working hours or look for another job and improve the targeting of short-time work subsidies to jobs at risk of being terminated.
  • Provide support for job search and career guidance. The mobility of workers from subsidised to unsubsidised jobs can be promoted by encouraging or requiring workers on JR schemes to register with the public employment services and benefit from their support (e.g. job-search assistance, career guidance and training).
  • Promote training while on reduced working hours. Participation in training hours can help workers improve the viability of their current job or improve the prospect of finding a new one. Combining training with part-time or irregular work schedules is easier when training courses are targeted at individuals rather than groups, delivered in a flexible manner through online teaching tools and their duration is relatively short.


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