Job retention schemes
This chapter evaluates job retention schemes in the Nordic countries. During the recession triggered by the COVID-19 pandemic, the Nordic countries successfully stabilised employment and suffered less of a fall in GDP than other European economies. The policy measures taken were heterogeneous across the Nordic Region and involved quite different allowances for workers and firms. One feature unique to the Nordic countries is that they all simultaneously increased unemployment benefits during the crisis. Their successful economic performance is probably partially attributable to generous benefit extensions that proved effective in stabilising demand. When evaluated from the viewpoint of economic theory, job retention schemes in the Nordic Region are generally designed well because they address the potential inefficiency losses (deadweight effects) of wage subsidies. They could, however, allow for greater individual flexibility, transparency and predictability.
Balleer, A. (2024), Job retention schemes. In Lars Calmfors and Nora Sanchez Gassen (Hrsg.), Economic policy beyond the pandemic in the Nordic countries. Stockholm: Nordregio, 83-118.