The Belgian Short-time Work scheme: Economic and Psychological impacts - BESWEP (BESWEP)

This research studies the impact of the Belgian short-term work (STW) compensation scheme, coined “temporary unemployment” on psychological outcomes for employees in the short and longer term. STW is a policy instrument installed at the Belgian federal level to avoid the costly process of separation and re-hiring during the temporary reduction in production and demand. STW has had particular resonance during the COVID-19 pandemic. At the peak of the lockdown in April 2020, as many as 1,167 million persons - about 30% of eligible employees - benefited from a Corona version of STW for at least one day. The economic viewpoint is that STW may avoid bankruptcy of firms, and it avoids the social cost of unemployment. The psychological viewpoint, in particular the impact on employee well-being and careers, has attracted comparatively little attention. Our hypothesis is that STW is not only positive, but may have unintended negative side effects. In particular, employees in STW may feel more insecure and may experience a sense of dehumanization. We will study this hypothesis using longitudinal surveys and accounting for relevant comparison groups. This project is a collaboration between Nele De Cuyper, Hans De Witte (KU Leuven) and Florence Stinglhamber (UCLouvain). It is part of a larger project including also an economic perspective that is covered by  Bart Cockx (UGent) and Muriel Dejemeppe (coordinator; UCLouvain).