IZA Discussion Paper No. 14863

Did the Australian Jobkeeper Program Save Jobs by Subsidizing Temporary Layoffs?

We analyze the JobKeeper lump-sum wage subsidy introduced by the Australian government in response to the COVID-19 pandemic, paying particular attention to the role of temporary layoffs in saving jobs. Although temporary layoffs were widely used, we find that recalls of workers on temporary layoff played only a small role in the early recovery. This suggests either that temporary layoffs were very long, or that many workers on temporary layoffs were never recalled.

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