This chapter provides an overview of the development of job retention support through the COVID-19 pandemic. Based on rich administrative data, it also provides information on the patterns of job retention support use across firms and workers and examines its implications for productivity-enhancing labour market reallocation.
An Assessment of Job Retention Support During the COVID‑19 Pandemic and its Aftermath in Belgium
Abstract
Job retention support in Belgium through the COVID‑19 pandemic
Belgium entered the COVID‑19 pandemic with a well-established, though fragmented, job retention scheme (“temporary unemployment”) that primarily supported firms facing seasonal fluctuations and blue‑collar workers experiencing economic difficulties. The scheme was rapidly simplified to ensure broad coverage, reaching a peak of 30% of dependent employment in April 2020, placing take‑up in Belgium well above the OECD average.
Less productive firms demonstrated substantially higher take‑up rates (16.6% of workers versus 6.4% in the most productive firms). Prior experience was a strong predictor of pandemic usage, with 51% of experienced firms utilising support compared to 14% without prior experience. Usage was concentrated in heavily exposed sectors, such as construction, manufacturing, administrative support, and accommodation services, with the latter becoming heavily dependent despite minimal pre‑pandemic experience in the schemes use. White‑collar workers comprised 43% of recipients at the pandemic’s peak, departing from the historically high concentration among blue‑collar workers. Educational differences were stark: 20% of low-educated workers received support in 2020 versus just 3% of highly educated workers.
While Belgium’s typical “job ladder” from less to more productive firms continued operating during the pandemic, the overall process of productivity-enhancing reallocation of workers was slightly dampened by increased employment mobility (workers moving in and out of employment). This was mainly concentrated among the least productive firms, who saw decreasing separations rather than increased hiring, suggesting job retention schemes may have helped these firms retain workers they might otherwise have laid off. While this is partly intended, these negative effects of employment mobility on productivity-enhancing reallocation lasted will into 2022, when the acute phase of the crisis already subsided. As such, it likely dampened aggregate productivity growth.
Belgium’s “temporary unemployment” (chômage temporaire/tijdelijke werkloosheid) system represents one of the oldest and most extensively used job retention schemes across OECD countries. Originally developed to address seasonal fluctuations and economic difficulties through multiple sub-schemes, this system underwent rapid transformation in March 2020 to respond to the unprecedented challenges posed by widespread lockdowns and containment measures. Through administrative simplification and expanded eligibility, the scheme reached coverage levels well above the OECD average during the pandemic’s peak.
This chapter begins by tracing the institutional evolution of the scheme’s design, documenting how existing mechanisms were adapted and new provisions introduced to address pandemic-related disruptions. It then investigates participation patterns across different types of firms and workers, drawing on comprehensive administrative records from the National Employment Office (ONEM/RVA) and detailed linked employer-employee microdata from the Crossroads Bank for Social Security and the Belgian National Bank. The latter data in particular enable novel insights into how take‑up varied across firms with different productivity levels and prior experience with the scheme. The chapter concludes by examining the broader implications of the COVID‑19 pandemic for labour market functioning, specifically analysing how it affected productivity-enhancing worker reallocation.
2.2.1. Belgium operates different forms of job retention support for different purposes
With temporary unemployment (chômage temporaire / tijdelijke werkloosheid), Belgium already had a job retention scheme (JRS) in place well before the COVID‑19 pandemic. While it is difficult to trace its exact origins, it seems to have originated from the decentralised union unemployment funds.1 Over time, it evolved to provide support during economic downturns and other external factors that impede the usual operation of business activities by offering partial earnings replacement for employees whose working hours are reduced or whose employment contract is temporarily suspended. During this period, the employer is not required to pay salaries, social security contributions or provide additional fringe benefits. Instead, workers on temporary unemployment directly receive benefits from the National Employment Office ONEM/RVA, which are processed by payment organisms, such as the respective trade union (or the Auxiliary Fund for Payment of Unemployment Benefits for non-unionised workers).2 Initially, this system only existed for blue‑collar workers, but it was extended to white‑collar workers in response to the global financial crisis in 2009, albeit with stricter eligibility requirements.
At present, job retention support in Belgium takes different forms depending on the specific situation that affects business activity (see Annex Table A.A.1). Temporary unemployment work can, for example, be used for economic reasons to provide a buffer against temporary reductions in business demand (raisons économiques / economische redenen) or to bridge temporary business closures brought on by sudden and unpredictable outside events such as power cuts, bad or extreme weather, strikes or force majeure. Job retention support for economic difficulties was by far the most widely used scheme in Belgium in the years prior to the COVID‑19 pandemic, accounting for 70% of job retention payments in 2011 and 2019, while the force majeure scheme only accounted for about 2% of claims. The coverage of bad weather events is particularly important for the construction sector, where it alone accounted for 20% of all job retention support payments between 2011 and 2019.
In response to the COVID‑19 crisis, Belgium quickly scaled up job retention support by introducing a simplified force majeure coronavirus scheme to expedite the application process. Essentially all COVID‑19‑related temporary unemployment claims were treated under the force majeure modality, with simplified eligibility conditions and procedural requirements. With some modifications, this simplified scheme was active until June 2022.
Temporary unemployment for economic reasons can be used when there is a significant temporary reduction in sales, production or orders, while force majeure temporary unemployment can be used in the context of an unexpected and temporary event beyond the control of the firm (e.g. natural disaster, government action). In both cases, applications are made by firms via an electronic notification of the anticipated suspension to ONEM/RVA. Workers and the works council must be informed at least seven days prior to the beginning of temporary unemployment and are required to submit a monthly “control card” (C3.2A card3) that records days not worked at their firm to their respective trade union (or to the Auxiliary Fund for Payment of Unemployment Benefits for non-unionised workers). The control card allows comparing the number of suspended days anticipated by employers with the number of days not actually worked as reported by employees.
Employees placed on temporary unemployment for economic reasons had to be eligible for full unemployment benefits, but this condition was removed after the COVID‑19 pandemic (see below). This effectively ensured that support was targeted towards workers with some tenure who are more likely to have accumulated some firm-specific knowledge that would be costly to rebuild if the worker were to be laid off. However, it also risks exacerbating labour market duality by widening the gap in employment protection between tenured workers and recent hires or between permanent and temporary workers. While apprentices were eligible for temporary unemployment, students still entitled to child benefits who work part-time and do not pay full social security contributions did not qualify. In contrast, the force majeure version requires a full suspension of activity but does not require affected workers to meet the minimum contribution requirements for full eligibility to unemployment benefits.
For temporary unemployment due to economic reasons, the procedures and requirements differ between blue‑ and white‑collar workers, which is not the case for the force majeure variant. Blue‑collar workers can be placed on temporary unemployment if the firm is temporarily unable to maintain its level of work due to economic difficulties. There is no need for providing any economic justification or having a collective agreement (or, in its absence, an approved business plan). Instead, the trade unions monitor the appropriate use of temporary unemployment to ensure it complies with legal requirements and take action when misuse is suspected. By contrast, white‑collar workers can only be placed on temporary unemployment for economic reasons when an economic justification is provided4 and a collective agreement is in place that explicitly allows for this possibility or, in its absence, the employer has a business plan that has been approved by the FPS Employment, Labour and Social Dialogue. Other OECD countries typically do not differentiate procedures across groups of workers. Austria was a notable exception which limited the use of job retention support to blue‑collar workers until 2018.
Temporary unemployment for economic reasons and force majeure replaces 65% of the gross monthly salary, capped at a maximum of 66% of the average gross monthly salary, similar to regular unemployment benefits during the initial three months of receipt. A tax of 26.75% is directly withheld from the temporary unemployment benefit, which typically exceeds the actual income tax due at the end of the year (NBB, 2020[1]). However, on top of the temporary unemployment benefit, there are sectoral- and firm-level top-ups paid by the employers, which can differ widely between and within sectors. For example, in the metal industry, specific agreements at the branch level provide for a daily supplement of EUR 12.07 (EUR 6.04 for part-time workers). For blue‑collar workers, this supplement is covered entirely by sectoral funds financed through contributions from employers. Conversely, for white‑collar workers, the employer is responsible for paying the supplement, but they receive a reimbursement for half of the cost from the sectoral fund (Serroyen, 2021[2]).5
The maximum duration with which temporary unemployment for economic reasons can be used depends on its intensity. Blue‑collar workers can either be put under temporary unemployment for i) less than three working days per week for a maximum of 12 months (small suspension), ii) three working days or more every week for a maximum of three months (large suspension), or iii) under a full suspension for a maximum of 4 weeks (total suspension). At the end of a large or total suspension, a full working week at normal employment can reinstate the right to apply once more for temporary unemployment due to economic reasons as long as the eligibility conditions are still met. In the case of small suspensions, new applications can be made immediately after and, in the case of large or total suspensions, after a cooling period of one week, as long as eligibility conditions are still met. White‑collar workers can be placed either on reduced working time with at least two days of work per week for a maximum of 26 weeks or be fully suspended for a maximum of 16 weeks. In contrast to temporary unemployment for blue‑collar workers, suspensions are not renewable. Force majeure temporary unemployment is valid for a maximum of three months, but can be renewed as long as the force majeure event persists, without cooling off period.
2.2.2. The simplified force majeure variant during the COVID‑19 pandemic and the subsequent energy crisis
From March 2020 to June 2022, Belgium operated a simplified force majeure variant, which was used for all COVID‑19 related claims (only in September 2020 was it restricted to particularly hard-hit sectors) (Table 2.1). It eased the application procedure using simplified forms, suppressed the requirement to send a notification to ONEM/RVA I, shortened the period for notifying workers or their representatives from seven to three days, and did no longer require the submission of control cards. These simplified procedures and reduced administrative requirements significantly reduced the time needed to process applications. Despite the surge in requests for temporary unemployment, 77% of claimants received payments within ten days after the month they became unemployed, and 97% within 30 days. In normal times, only 38% of recipients receive payments in the same timeframe (ONEM/RVA, 2021[3]).
The crisis variant did not impose any significant conditions on eligibility, its use or maximum duration. In contrast to the regular variant of force majeure, it could be used for both partial and complete suspensions and there were no limits on the receipt period. The only requirement for firms was to file a “social risk declaration” at the end of each month stating the number of hours of temporary unemployment in the firm. As in the regular variant of force majeure, worker eligibility did not require meeting the minimum contributions for unemployment benefits. This is in line with the international practice during the COVID‑19 crisis (OECD, 2021[4]). This meant that workers on temporary contracts were eligible irrespective of their contribution history.
The simplified variant for force majeure also provided more generous support to workers. It provided benefits equal to 70% of previous gross earnings for hours not worked, under the same maximum ceiling as before the pandemic, alongside a daily supplement of EUR 5.63 from ONEM/RVA, instead of 65% and supplements by employers or from sectoral funds in the variants for economic reasons and normal force majeure. Additionally, the social partners agreed to provide top ups in some industries, with around 16% of all job retention support recipients receiving such top-ups (Thuy, Van Camp and Vandelannoote, 2020[5]).6 In May 2020, the tax withheld from the temporary unemployment benefit was reduced from 26.75% to 15%, while it continued to be at 26.75% for employer supplements. In early 2022, the daily supplement to the temporary unemployment benefit was raised from EUR 5.63 to EUR 6.10.7
In contrast to several other OECD countries, the simplified force majeure temporary unemployment scheme did not include any direct incentives for training during the COVID‑19 pandemic. A key obstacle for this was Belgium’s fragmented labor market administration, which separates the national body handling job retention support payments from the regional Public Employment Services (PES) responsible for training (OECD, 2023[6]). This division created practical barriers. For example, when the Flemish region attempted to introduce training requirements for long-term recipients of job retention support, the national PES did not share recipient information. Employer organisations worried that promoting training might signal job insecurity to workers, potentially leading them to quit (OECD, 2023[6]).8
Source: ONEM / RVA, FOD Werk / SPF Emploi, Eurofound - EU PolicyWatch: Database of national-level policy measures, https://static.eurofound.europa.eu/covid19db/cases/BE-2020-11_380.html.
In light of the reduced number of COVID‑19 cases in the summer of 2020, alongside persistently high levels of temporary unemployment use and high administrative pressure on ONEM/RVA and the payment organisms, the government decided to tighten the criteria for temporary unemployment from September 2020. Simplified force majeure was restricted to companies and sectors that were severely affected by the pandemic and related economic restrictions. This was considered to be the case for firms in which working time was reduced by at least 20% in Q2 2020 as well as the taxi, audiovisual, hotel, entertainment, socio-cultural, and tourist attractions sectors. Similar forms of targeting were introduced in several other OECD countries (e.g. France, Spain).
When the virus resurfaced, the simplified variant of temporary unemployment force majeure was extended again to all firms from October 2020 and was kept in place until June 2022. Consequently, the crisis scheme remained in place for significantly longer than crisis schemes in most other countries (OECD, 2022[7]). From April 2022 to June 2022, Belgium extended the simplified temporary unemployment for force majeure to firms affected by rising energy prices.
After the expiration of the simplified force majeure scheme, temporary unemployment for economic reasons became again the main variant. At the same time, pre‑pandemic requirements of full unemployment benefit eligibility were removed. As several transitional measures remained in place until the end of 2022, the use of the control card, the requirement for an economic justification for white‑collar workers and the one‑week cooling off period for blue‑collar workers were only re‑introduced in the beginning of 2023. COVID‑19 related claims moreover did not require having a collective agreement or approved business plan until mid-2023.
Zooming in on the use of Belgium’s temporary unemployment scheme across firms and workers can provide insights on who used the scheme. The analysis in this section draws on two complementary data sources. First, administrative data provides comprehensive coverage of all temporary unemployment payments, enabling analysis of aggregate trends, sectoral patterns, and the evolution of different scheme variants over time. Second, detailed linked employer-employee data9 allows to examine firm-level take‑up of job retention schemes, the relationship between productivity and take‑up, and detailed characteristics of the workers that used job retention schemes. Together, these sources provide rich information on how Belgium’s job retention scheme was used in practice.
The use of job retention support during the pandemic in Belgium was based on the force‑majeure scheme, which effectively absorbed the scheme for economic reasons. Prior to the COVID‑19 pandemic, the majority of job retention payments were disbursed through the scheme for economic reasons. A significant portion of payments during the fall and winter months were made through the scheme for bad weather events, particularly in the construction sector (Figure 2.1). From the start of the pandemic, the COVID‑19 force majeure scheme, with its broad accessibility and weakened eligibility conditions, effectively absorbed the use of temporary unemployment for economic reasons,10 while its use for weather-related reasons was not much affected.11,12 Following the phase‑out of the COVID‑19 force majeure scheme, its use fell back to near zero, while that for economic and weather-related reasons picked up. Beyond normal seasonal patterns, the slight increase in the use of job retention support towards the end of 2022 is related to its use in energy-intensive sectors following the rise in energy prices.13 In 2023, the use of temporary unemployment (on average 2.4% of employment) was only slightly higher as compared to 2019 (on average 2.0% of employment). This may stem from rising vulnerabilities in sectors like manufacturing, which experienced a renewed use of temporary unemployment due to declining activity (ONEM, 2024[8]).
Temporary unemployment payments by type as a share of dependent employment
Note: In contrast to Figure 3.10 in the next chapter, which measures actual monthly take‑up, the disaggregation by type of temporary unemployment scheme presented here refers to payments made. These payments can sometimes be made in different months than the actual take‑up of temporary unemployment. For example, in 2020, 76% of all claims resulted in payments within a month, up from 38% in 2019 (ONEM/RVA, 2021[3]).
Source: OECD calculations based on ONEM/RVA data.
2.3.1. The use of job retention support across industries
The use of the job retention support before the pandemic was concentrated in the construction sector (Figure 2.2), particularly through seasonal uptake in winter months. This pattern of recurrent, seasonal use raises important policy questions about whether the scheme is creating unintended cross-subsidies to certain firms and sectors, potentially distorting the optimal allocation of resources. These concerns are explored in detail in Box 2.2. In other sectors like manufacturing as well as administrative and support services, the use of job retention support was also relatively prevalent before the COVID‑19 pandemic. In contrast, job retention support was barely used in public administration, education, and the financial sector.
Many employers rely on job retention schemes as a buffer during economic difficulties. However, Belgium’s system exhibits a distinctive pattern of structural use of temporary unemployment, treating it as a regular flexibility tool rather than as an emergency measure. A structural dependence on the temporary unemployment scheme, alongside seasonal dependence in certain sectors, may be one of the reasons for high take‑up outside of crisis situations compared to other OECD countries.
Between 2012 and 2019, approximately 19% of employers using the scheme for economic reasons did so for at least two‑thirds of the time. A total of 382 companies even used temporary unemployment continuously throughout this entire eight‑year period. However, these companies do not necessarily use job retention support very intensively, as the share of firms using temporary unemployment particularly intensely (in terms of worker-days supported) is highest among sporadic users of the scheme. This structural usage pattern is fairly consistent across most sectors, with the exception of the manufacturing sector, where companies use temporary unemployment structurally about 50% more frequently than firms in other sectors. However, the analysis of structural use is limited to the temporary unemployment scheme for economic reasons, and therefore ignores schemes that specifically apply to certain sectors (e.g. construction). Firms in these sectors might primarily resort to these schemes or alternate between these and the one for economic reasons, which may mask patterns in structural dependence on temporary unemployment in this analysis.
Source: ONEM/RVA (forthcoming[9]), Employers With Economic Difficulties – Focus On Economic Temporary Unemployment.
Average monthly temporary unemployment payments as a share of dependent employment by sector
Source: OECD calculations based on ONEM/RVA data.
During the COVID‑19 pandemic, the take‑up of job retention schemes increased considerably across the board, as pandemic-related lockdown and other containment restrictions severely curtailed economy activity across sectors. As such, the sectoral pattern of take‑up appears to be broadly consistent over time. For example, relatively high take‑up during the COVID‑19 pandemic tends to be associated with relatively high pre‑ and post-pandemic take‑up in construction, administrative and support services as well as manufacturing. Accommodation and food services is a notable exception, with a relatively high use during the pandemic and its aftermath due to forced closures during lockdown, and other restrictions and a relatively low use before the pandemic. It is also the only sector where job retention schemes were used to a similar extent in 2021 as during the onset of the COVID‑19 pandemic in 2020. Overall, the sectoral pattern during the pandemic was driven by the degree to which sectoral activity was affected due to the need for in-person contact, the difficulty of adapting to telework, or disruptions in output demand or the supply chain.
The evidence suggests that the use of job retention support for seasonal reasons is quite important in Belgium (see e.g. Cahuc and Nevoux (2017[10]) and Bermudez, Dejemeppe and Tarullo (2023[11])). While its use may seem limited in the aggregate, it is very large once one realises that seasonal work largely concerns construction, where in 2022 one in eight workers was placed on support in any given month. There are several other countries where the use of job retention support work for seasonal reasons is quite common, such as France and Germany, but little is known about its economic consequences.
Cahuc and Nevoux (2017[10]) show based on an analysis for France that the use of job retention support for seasonal reasons induces a recurrent use among a specific group of firms and effectively acts as a cross-subsidy to recurrent users. They argue that this distorts the optimal allocation of resources across firms in the economy and reduces aggregate output. To enhance overall efficiency the recurrent use of job retention support could be discouraged by requiring firms to cover some of its costs for hours not worked. This could take the form of direct co-financing or a bonus-malus system based on experience‑rated social security contributions in which employers pay back a fraction of the cost of hours not worked through higher social security contributions in the future. Experience‑rating is preferred to direct co-financing since it allows to effectively support job retention in financially constrained firms while reducing the adverse impact of recurrent job retention support on aggregate production. To avoid that such as a system simply leads to a shift from seasonal job retention support to seasonal unemployment insurance, social contributions for unemployment should be experience‑rated as well. In the end, the key question is whether employers should be held accountable for the use of job retention or unemployment benefits by their employees.
Only few countries operate experience‑rated employer contributions for unemployment insurance or job retention support. The United States had such a system for a long time, while it was introduced in 2022 in France for unemployment insurance. One reason why few countries operate such systems may be that they tend to be difficult to implement. With the advancement of digital technologies, this argument has become less important.
Unemployment insurance benefits in the United States are primarily financed through experience‑rated employer contributions for unemployment insurance. Each employer has a fictional account that is credited with their contributions and debited with claims from its ex-employees. The balance relative to the wage bill of the employer (highest over the past three to five years) determines the level of contributions subject to a floor and a ceiling. The actual rates vary across states and time. According to the Department of Labor, about 60% of unemployment claims is individualised such that the employer pays for the fiscal cost of layoffs of its own workers, while the other 40% is shared evenly across firms due to the role of floors and ceilings.
France introduced a “bonus-malus” system for unemployment insurance in selected sectors in September 2022. The main rationale of the reform was to limit the excessive use of short-term contracts. This bonus-malus modulates the rate of the employer’s unemployment insurance contributions, depending on the number of workers in a firm whose contract is terminated and subsequently registered with the public employment services as a share of its workforce. Firms with a separation rate above the median will see an increase in their contributions up to a ceiling of 5.05% of the wage bill, while firms with a lower rate will experience a reduction down to a floor of 3%. The bonus-malus system applies to firms with more than ten employees in sectors with an average separation rate of more than 150% of the national rate and is calculated based on the separation rate during the previous year. An evaluation by UNEDIC suggests that even small differences in contribution rates can induce significant changes in firm behaviour (Brembilla et al., 2025[12]).
Source: Cahuc and Nevoux (2017[10]), Inefficient Short-Time Work, https://www.iza.org/de/publications/dp/11010/inefficient-short-time-work and OECD (2024[13]), Preparing ERTE for the Future: An Evaluation of Job Retention Support in Spain During the COVID-19 Pandemic, https://doi.org/10.1787/a70bf8ec-en.
Even after health-related restrictions were withdrawn, take‑up of temporary unemployment remained elevated in administrative and support services, manufacturing as well as construction, where respectively 6%, 7% and 10% of jobs were still supported by job retention schemes. While this level is comparable to the pre‑crisis period in construction, about 25% more workers remain on temporary unemployment support in administrative and support services than prior to the pandemic and 50% more in manufacturing. Several other sectors, such as transport and storage, as well as water supply and waste management, also saw higher take‑up rates of job retention schemes in 2023 than prior to the COVID‑19 pandemic. This may suggest that the pandemic-related expansion of temporary unemployment created a new-found dependence on job retention support for some firms.
2.3.2. Which firms used job retention support?
It is not immediately obvious whether more or less productive firms would be more likely to use these programmes in the context of a pandemic. On one hand, more productive firms often invest more strongly in training their workers, creating strong incentives to keep employment relationships, rather than to lose such investments in their workforce. On the other hand, firms that are already struggling financially might find subsidised worker retention especially attractive when they cannot afford to keep paying wages during a downturn. Using microdata from the Belgian Crossroads Bank for Social Security, as well as information on firm-level value‑added per worker from the Belgian National Bank, it is possible to investigate which types of firms adopted job retention schemes and how the use varied along the distribution of firm productivity.
The evidence from Belgium shows a clear pattern: less productive firms were much more likely to use temporary unemployment, both before and during the pandemic (Figure 2.3). Prior to the pandemic, 7.3% of firms and 4.5% of workers in the 20% least productive firms used job retention schemes on average per quarter, while among the 20% most productive firms, only 2.5% of firms and 1.6% of workers used temporary unemployment on average per quarter. The overall negative relationship with productivity was preserved during the COVID‑19 pandemic and even increased in strength.14 The first quintile of the firm productivity distribution again showed the highest take‑up at 16.6% of workers (22.7% of firms) while 6.4% of workers took up job retention schemes in the top quintile (11.7% of firms). These findings suggest that financial constraints, which may be more prevalent among less productive firms, drove most decisions to use job retention support.15
The accommodation and food services sector was a notable exception during the COVID‑19 pandemic, showing the opposite pattern where higher productivity firms were more likely to take up job retention support (see Figure A.A.1). This likely reflects sector-specific factors: more productive hospitality businesses tend to be larger establishments (hotels, restaurant chains) with valuable skilled staff worth retaining, whilst lower productivity establishments often rely more on easily replaceable casual labour where the benefits of keeping workers during a temporary closure are more limited.
Average quarterly share of firms and workers on job retention schemes by quintile of the firm-distribution of average productivity
Note: The figure shows the average quarterly share of firms using job retention schemes at least once and workers placed at least once on job retention schemes across quintiles of the employment-weighted distribution of average pre‑pandemic labour productivity. It is based on employment-weighted firm-level regressions of the intensive margin of job retention schemes use on quintile dummies, firm size and quarter fixed effects (Equation 2). Firm labour productivity and firm size are measured as the average between 2018 and 2019. As an example, it shows that an average of about 20% of workers in the least productive firms was placed on job retention schemes during the COVID‑19 pandemic.
Source: OECD calculations based on microdata from the Belgian Crossroads Bank for Social Security and the Belgian National Bank.
Interestingly, prior experience with job retention schemes is strongly associated with the use of temporary unemployment during the COVID‑19 pandemic. Indeed, About 51% of the firms that had used temporary unemployment before the pandemic (in 2017 to 2019) made use of this support scheme on average per quarter during the COVID‑19 pandemic, considerably more than the 14% firms that did not have temporary unemployment experience before the pandemic (Figure 2.4).16 This could either reflect familiarity with the scheme or the persistence of use for structural reasons among low-productivity firms. While the pandemic created widespread need for employment adjustment, firms with established knowledge of temporary unemployment schemes may have been better positioned to utilise these schemes as a primary adjustment tool. On the other hand, structural users and less productive firms may have been more exposed to liquidity constraints during the COVID‑19 pandemic and therefore made more use of job retention support.
The association of prior experience with the use of job retention scheme during the COVID‑19 pandemic varied considerably across sectors. For the accommodation and food services sector, which was among the hardest hit sector by the lockdown restrictions, the difference between experienced and inexperienced firms was relatively modest (43% of workers among experienced firms and 36% among inexperienced firms, see Figure A.A.2). This contrasts with all other sectors, where firms with pre‑pandemic experience had significantly higher uptake, and by the end of 2022, the accommodation and food services sector’s usage had fallen to the low levels of inexperienced firms elsewhere (Figure A.A.3). Firms with and without prior experience in the accommodation and food services sector used job retention schemes at similarly high rates almost throughout the entire pandemic, only meaningfully diverging from another from mid-2021. In contrast to other sectors, where take‑up rates were only comparable in the initial months of the pandemic (e.g. in construction, administrative and support services) or remained noticeably different throughout (e.g. manufacturing).
Average quarterly share of firms and workers on job retention schemes during the pandemic (Q1 2020 – Q4 2022) by previous JRS use of firms between 2018 and 2019
Note: Non-users refer to firms that did not use job retention schemes once between 2017 and 2019. Users refer to firms that placed at least one worker on job retention schemes between 2017 and 2019.
Source: OECD calculations based on microdata from the Belgian Crossroads Bank for Social Security.
Taken together, these patterns suggests that the use and persistence of these schemes were driven by a combination of acute necessity and pre‑existing structural dependence, with a strong distinction emerging between experienced and inexperienced firms over time. For sectors hit by a severe shock, such as accommodation and food services, the sheer necessity of survival drove widespread of job retention scheme adoption among most firms, largely erasing the advantage of pre‑pandemic experience. However, in most other sectors, previous experience was a key determinant; firms that had used job retention schemes before the pandemic were significantly more likely to use them again and more intensively. The most crucial difference lies in persistent use, as for firms without prior experience, of job retention schemes were largely a temporary tool that was eventually abandoned as the crisis faded. In contrast, for firms with pre‑pandemic experience, the schemes acted as a readily available and embedded operational tool, with their usage remaining elevated long after the initial shock.
2.3.3. Which workers were placed on job retention support?
Prior to the COVID‑19 pandemic, temporary unemployment schemes in Belgium were predominantly used by blue‑collar workers, in part due to easier firm-level eligibility requirements as well as their concentration in sectors like construction and manufacturing which regularly face seasonal or cyclical downturns. For example, in 2019, blue‑collar workers made up more than 90% of recipients of job retention support (Figure 2.5). However, the onset of the COVID‑19 pandemic in 2020 triggered a massive surge in job retention uptake across many types of workers, including those in white‑collar employment. At the peak of the pandemic in Q2 2020, white‑collar workers made up about 43% of all job retention support recipients. As the COVID‑19 pandemic progressed beyond the initial lockdown restrictions, the number of both blue‑ and white‑collar recipients of job retention support fell, but disproportionally so for white‑collar employees, with their share of recipients falling to 27% in 2021, 17% in 2022 and 12% in 2023. However, the number of white‑collar workers in job retention schemes in 2023 is still about twice as high as in 2019, and their share among all job retention support recipients about 50% larger than before the pandemic. This may suggest a minor paradigm shift, where some firms have gotten used to placing their white‑collar workers on job retention support after they gained practice with this during the COVID‑19 pandemic.
The legal distinction between blue‑ and white‑collar workers, a remnant of historical labour market structures where their legal status was not harmonised, is also embedded in Belgium’s system of temporary unemployment. This distinction adds administrative complexity and may no longer be fit for purpose in a modern labour market.
Temporary unemployment payments by worker type as a share of dependent employment
Note: See note to Figure 2.1.
Source: OECD calculations based on ONEM/RVA data.
Beyond worker types, the uptake of temporary unemployment payments varied significantly by educational attainment and gender, whereas it tended to be more evenly distributed by age and region (Figure 2.6).17 This unequal use of job retention support across education groups and gender tended to be particularly pronounced before and after the pandemic when the use of job retention support was strongly concentrated among low-skilled men. For example, before the pandemic 3% of men in dependent employment were receiving temporary unemployment benefits against 1% of women. Similarly, just 0.1% of the highly educated received temporary unemployment benefits, whereas 2% and 5% of middle‑ and low-educated workers did so, respectively. To some extent, this may reflect an overlap with the group of blue‑collar workers and the concentration of support in construction and manufacturing in normal times.
Average monthly temporary unemployment payments, percentage of dependent employment
Source: OECD calculations based on data from ONEM/RVA, StatBel and Eurostat.
During the pandemic, differences in the relative use of support between skill and gender groups narrowed but remained sizeable, particularly across skills groups. This high concentration among lower educated workers mirrors experiences in other OECD countries, where job retention schemes typically support workers in sectors and occupations with lower educational requirements. The heavy concentration of temporary unemployment among workers with low educational attainment suggests that times of job retention could offer an opportunity improve the skills and future employability of the workforce. Several countries have recognised this, incorporating explicit incentives and support for training during periods of job retention support (see Box 2.3).
While job retention schemes provide crucial income support, their often passive design represents a missed opportunity to improve the skills and future employability of the workforce. This is particularly the case for the over-represented group of workers with low educational attainment. Several OECD countries successfully integrated training into their job retention schemes, for example:
Germany: Starting in January 2021, the German Government paid for up to 100% of the training costs for employees on short-time work (Kurzarbeit), with the exact coverage depending on firm size. Firms that provided training also received an additional 50% discount on their social security contributions. This training-specific discount was stacked on top of the standard exemptions for the program, meaning that between January and March 2022, firms training their workers paid no social security contributions at all (OECD, 2024[13]).
France: The existing FNE‑Formation programme was adapted specifically for the COVID‑19 pandemic. The French Government agreed to cover up to 100% of the costs for training undertaken by employees placed on the activité partielle scheme (depending on firm-size) from March 2020 to March 2021, with partial coverage thereafter. Workers could further use their individual training accounts (Compte Personnel de Formation – CPF) for reimbursement of training expenses (DARES, 2021[14]; OECD, 2024[13]).
Austria: The Public Employment Service (AMS) reimbursed 60% of training costs for employees on the scheme (75% from later parts of the pandemic) during the COVID‑19 pandemic. The time spent in training was counted as working time for the employee but as lost hours for the employer, and therefore subsidised by the government (Bundesministerium der Finanzen, 2025[15]).
In some other countries, like Hungary and the Netherlands, participation in training was also a formal requirement for receiving job retention support during the COVID‑19 pandemic (OECD, 2020[16]).
While job retention schemes are a vital mechanism for preserving employment during crises and downturns, they may hinder the process of productivity-enhancing job reallocation, thereby disrupting the normal functioning of the labor market. As workers are retained in their current positions, they are prevented from moving to more productive firms. Since less productive firms tend to be the primary users of such support, more productive firms may struggle to recruit the workers they need to grow, as the available workforce is effectively “stuck” in less productive roles (Cahuc, 2024[17]; Andrews, Charlton and Moore, 2021[18]).
The reallocation of workers from less to more productive firms is a key driver of economic dynamism and aggregate productivity growth (OECD, 2025[19]). This process operates through two primary channels: voluntary job-to-job mobility and employment mobility. By subsidizing existing employment relationships, job retention schemes can suppress both channels.18 It may reduce voluntary mobility because workers remain attached to their jobs and decreases involuntary mobility because firms are able to retain workers they might otherwise lay off, ultimately slowing the reallocation of labor toward more productive firms.
Building on the work developed for the OECD Employment Outlook 2025 (OECD, 2025[19]) this section documents how growth-enhancing job reallocation evolved in Belgium during the COVID‑19 pandemic (see Box 2.4 for cross-country evidence on growth-enhancing reallocation before the COVID‑19 pandemic).19 It documents the process of net job reallocation along the distribution of firms in terms of their labour productivity levels. This section therefore seeks to identify which specific channels of reallocation were most affected and whether the traditional “job ladder” from less to more productive firms continued to operate effectively throughout and beyond the COVID‑19 pandemic.
Chapter 5 of the OECD Employment Outlook 2025 (OECD, 2025[19]) presents cross-country evidence on the process of growth-enhancing reallocation for 17 OECD countries on average between 2000 and 2019 based on annual, rather than quarterly, data (see Fluchtmann, Hijzen and Puymoyen (2025[19])). Figure 2.7 illustrates the key result from this chapter, which shows that job reallocation tends to redistribute employment towards firms with higher wages and productivity. The difference between average annual employment growth in the bottom 20% of firms (in terms of wages and productivity) and aggregate average annual employment growth is consistently negative, whilst it is consistently positive amongst the top 20% of firms. Put differently, employment is continually being reallocated from firms with low wages and productivity to those with high wages and productivity, thereby contributing to higher aggregate wage and productivity growth. This happens primarily through job-to-job mobility, with employment mobility playing a relatively minor role, despite both being roughly equal contributors to overall gross mobility.
Average annual net employment growth and its components due to net job-to-job and employment mobility by quintile of the firm-distribution of wages and productivity, relative to average employment growth
Notes: Net employment growth: average annual employment-weighted growth rate in employment among incumbent firms between one year and the next in deviation from aggregate employment growth rate. Net job-to-job mobility: average annual employment-weighted growth rate employment among incumbent firms due to workers changing employer from one year to the next in deviation from aggregate employment growth rate. Net employment mobility: average annual employment-weighted percentage change in employment among incumbent firms due to workers entering or exiting employment from year to the next in deviation from aggregate employment growth rate.
Unweighted average across countries. Firm-level average wages (17 countries): Austria, Belgium, Canada, Denmark, Estonia, Finland, France, Germany, Hungary, Italy, Lithuania, the Netherlands, New Zealand, Norway, Portugal, Spain and Sweden. Firm-level labour productivity (9 countries): Canada, Denmark, Finland, France, Hungary, Italy, the Netherlands, Portugal and Sweden.
Source: Fluchtmann, Hijzen and Puymoyen (2025[19]), OECD Employment Outlook 2025: Can We Get Through the Demographic Crunch?, https://doi.org/10.1787/194a947b-en.
Figure 2.8, Panel A, shows that prior to the COVID‑19 pandemic, between 2017 and 2019, job reallocation consistently shifted employment from lower productivity towards higher productivity firms. Indeed, the difference in average quarterly net employment growth in the bottom 20% of firms in terms of productivity is negative, whereas it is positive in the top 20% of incumbent firms. In other words, employment was reallocated from low-productivity firms to high-productivity firms, contributing to higher aggregate productivity growth. When decomposing overall net employment growth into (voluntary) job-to-job mobility and (involuntary) employment mobility, it is evident that most of this growth-enhancing reallocation was achieved through job-to-job mobility, while the role of employment mobility was much less pronounced and generally worked in an opposite direction. This suggests that growth-enhancing reallocation in Belgium mostly happened through a “job ladder”.
Average quarterly net employment growth among pre‑pandemic active firms and its components due to net job-to-job and employment mobility by quintile of the firm-distribution of labour productivity, relative to average employment growth
Notes: Net employment growth: average quarterly employment-weighted growth rate in employment among pre‑pandemic active firms between one‑quarter and the next in deviation from aggregate employment growth rate. Net job-to-job mobility: average quarterly employment-weighted growth rate employment among pre‑pandemic active firms due to workers changing employer from one‑quarter to the next in deviation from aggregate employment growth rate. Net employment mobility: average quarterly employment-weighted growth rate employment among pre‑pandemic active firms due to workers entering or exiting employment from quarter to the next in deviation from aggregate employment growth rate.
The figure shows the average quarterly change in the structure of private sector non-agricultural dependent employment across quintiles of the employment-weighted distribution of labour productivity and the extent to which this is driven by job-to-job mobility and employment mobility. It is based on employment-weighted firm-level regressions of employment growth on quintile dummies, average pre‑pandemic firm size and quarter fixed effects (Equation 1).
Source: OECD calculations based on microdata from the Belgian Crossroads Bank for Social Security and the Belgian National Bank.
During the COVID‑19 pandemic, the job ladder worked in essentially the same way as before, with an exception of negative net job-to-job mobility in the third quintile of the firm-productivity distribution. As such, workers continued to move from less- to more productive firms (Figure 2.8, Panel B). However, these patterns were dampened by a considerably more pronounced role of net employment mobility, which, for example, led to positive net employment growth in the second quintile of the productivity distribution, and therefore overall weaker growth-enhancing reallocation during the COVID‑19 pandemic. In general, however, changes in the role of net employment mobility were more strongly concentrated at the lower end of the firm productivity distribution, suggesting that particularly the least productive firms saw changes in employment growth through transitions in and out of employment.20
With the wide‑spread use of job retention schemes across the Belgian labour market, it may be the case that the change in the role of net employment mobility is a result of a decline in employment separations. In particular, it may be that the least productive firms are also more likely to struggle with acute liquidity constraints that complicated labour hoarding during the pandemic-induced economic downturn. Theoretically, the high use of job retention schemes may then manifest in a declining rate of separations among less productive firms, rather than increased hiring. To investigate this, Figure A.A.5 further decomposes the net employment mobility component of into its components related to hires and separations, and confirms that about two‑thirds of the relative increase in net employment growth through net employment mobility among the lower two quintiles is a result of decreased separations, rather than increases in hiring.
While the effects on net employment mobility at the lower end of the firm-productivity distribution are partly intended, they can become detrimental to reallocation and the normal functioning of the labour market if they persist well beyond the acute phase of the crisis and slow job creation in high productivity. To examine whether this was the case in Belgium, the results in Figure 2.9 present the evolution of firm-level responsiveness of net employment growth to labour productivity between Q1 2018 and Q4 2022.21
The results show that the role of job-to-job mobility remained fairly stable over time, positively contributing to productivity-enhancing job reallocation by reallocating workers from lower to higher productivity firms. While there were some declines in the strength of this process already in 2019 and through 2020 and 2021, the contribution of job-to-job mobility to productivity-enhancing job reallocation fully returned to the higher pre‑2019 levels by 2022. In line with the previous evidence, the patterns for employment mobility are different. While it initially contributed positively to productivity-enhancing job reallocation for most of 2017 to early 2019, it turned negative from the second quarter of 2019 and remained so afterward, with the exception of Q1 2020. Most notable, these negative effects on productivity-enhancing job reallocation tended to increase until mid-2022 and continued to contribute negatively afterwards.22 This happened despite a considerable increase in vacancy postings from early 2021 onwards, especially in sectors that used job retention schemes the most (Figure A.A.6). This suggests that productivity-enhancing job reallocation remained suppressed well after the COVID‑19 pandemic had mostly subsided, likely dampening overall productivity growth.
Productivity-enhancing reallocation among pre‑pandemic active firms as measured by the employment-weighted impact of firm-level labour productivity on net employment growth across firms, percentage points (p.p.)
Notes: Total: responsiveness of net employment growth to firm quality. Net job-to-job mobility: responsiveness of net job-to-job mobility to firm quality. Net employment mobility: responsiveness of net employment mobility to firm quality.
The figure shows the coefficients of employment-weighted firm-level regressions of employment growth among pre‑pandemic active firms on average log labour productivity. A positive coefficient indicates that job reallocation shifts the structure of employment towards better firms and is productivity-enhancing. Coefficients are normalised with respect to the standard deviation in firm-level productivity.
Source: OECD calculations based on microdata from the Belgian Crossroads Bank for Social Security and the Belgian National Bank.
References
[18] Andrews, D., A. Charlton and A. Moore (2021), “COVID-19, productivity and reallocation: Timely evidence from three OECD countries”, OECD Economics Department Working Papers, No. 1676, OECD Publishing, Paris, https://doi.org/10.1787/d2c4b89c-en.
[11] Bermudez, N., M. Dejemeppe and G. Tarullo (2023), “Theory and Empirics of Short-Time Work: A Review”, GLO Discussion Paper, Vol. 1348, https://www.econstor.eu/bitstream/10419/279649/1/GLO-DP-1348.pdf.
[21] Bevers, T. et al. (2020), “The End of the World as We Know It? L’Impact de L’Epidemie de COVID-19 Sur Le Marche du Travail Belge”, https://socialsecurity.belgium.be/sites/default/files/content/docs/fr/publications/rbss/2020/rbss-2020-1-the-end-of-the-world-as-we-know-it-l-impact-de-l-epidemie-de-covid-19-sur-le-marche-du-travail-belge.pdf.
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[15] Bundesministerium der Finanzen (2025), COVID-19 Förderung von Schulungskosten für Beschäftigte in Covid-19-Kurzarbeit, https://transparenzportal.gv.at/tdb/tp/leistung/1054238.html.
[17] Cahuc, P. (2024), “The micro and macro economics of short-time work”, in Handbook of Labor Economics, Elsevier, https://doi.org/10.1016/bs.heslab.2024.11.011.
[10] Cahuc, P. and S. Nevoux (2017), “Inefficient Short-Time Work”, IZA Discussion Paper, Vol. 11010, https://www.iza.org/de/publications/dp/11010/inefficient-short-time-work.
[14] DARES (2021), Rôle de la formation pendant la crise sanitaire : quelle articulation avec le chômage partiel ?, https://dares.travail-emploi.gouv.fr/publication/role-de-la-formation-pendant-la-crise-sanitaire-quelle-articulation-avec-le-chomage.
[20] Decker, R. et al. (2020), “Changing Business Dynamism and Productivity: Shocks versus Responsiveness”, American Economic Review, Vol. 110/12, pp. 3952-3990, https://doi.org/10.1257/aer.20190680.
[22] FPS Employment, Labour and Social Dialogue (2022), Labour Market and Origin, https://employment.belgium.be/sites/default/files/content/publications/Monitoring%202022%20ENG%20AS_0.pdf.
[23] Gelade, W. and Y. Saks (2024), “Rising number of sick pay recipients in Belgium: causes and results of reintegration policies”, NBB Economic Review, Vol. 3, https://www.nbb.be/doc/ts/publications/economicreview/2024/ecorevi2024_h03.pdf.
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[19] OECD (2025), OECD Employment Outlook 2025: Can We Get Through the Demographic Crunch?, OECD Publishing, Paris, https://doi.org/10.1787/194a947b-en.
[13] OECD (2024), Preparing ERTE for the Future: An Evaluation of Job Retention Support in Spain During the COVID-19 Pandemic, OECD Publishing, Paris, https://doi.org/10.1787/a70bf8ec-en.
[6] OECD (2023), Evaluation of Belgium’s COVID-19 Responses: Fostering Trust for a More Resilient Society, OECD Publishing, Paris, https://doi.org/10.1787/990b14aa-en.
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[8] ONEM (2024), Le chômage temporaire après la crise du coronavirus, https://www.onem.be/file/cc73d96153bbd5448a56f19d925d05b1379c7f21/56b3ce93b30eb832bcabe25e6f5d83cdbf42ebd2/2024_11_21_etude_ct_post_corona_fr.pdf.
[3] ONEM/RVA (2021), L’ONEM en 2020: Volume 1, https://www.onem.be/file/cc73d96153bbd5448a56f19d925d05b1379c7f21/5176f29a5893f01483007755a4afa5ecef836127/rapport_annuel_fr_vol1.pdf.
[9] ONEM/RVA (forthcoming), Employers With Economic Difficulties – Focus On Economic Temporary Unemployment.
[2] Serroyen, C. (2021), “Job retention schemes in Europe”, ETUI Working Paper, Vol. 7, https://www.etui.org/sites/default/files/2021-09/Job%20retention%20schemes%20in%20Europe%20-%20Belgium_2021.pdf.
[5] Thuy, Y., G. Van Camp and D. Vandelannoote (2020), “Crise COVID-19 : simulation de l’impact de la perte de salaire en cas de chômage temporaire en cas de force majeure et de la perte de revenu en cas de droit passerelle”, Revue belge de sécurité sociale:, https://socialsecurity.belgium.be/sites/default/files/content/docs/fr/publications/rbss/2020/rbss-2020-1-crise-de-la-covid-19-simulation-de-l-impact-de-la-perte-de-salaire-et-de-la-perte-de-revenus.pdf.
← 1. Statistics on temporary unemployment go back as far as 1921: https://www.onem.be/statistiques/series-historiques/chomage-temporaire-et-allocations-connexes.
← 2. In most other countries, firms receive subsidies to pay a replacement income to workers for hours not worked. The practical difference is unlikely to be important as long as payments, whether in the form of benefits or subsidies, are processed without significant delays.
← 3. From 1 September 2023, workers had the option to submit an electronic control card for temporary unemployment (eC3.2A). This electronic version became mandatory on 1 January 2025, with a transitional period allowing the continued use of paper cards in case of difficulties until 30 June 2025.
← 4. A proven reduction of at least 10% in turnover, production or orders during one of the 4 quarters preceding the request (e.g. demonstrated through the firms VAT declaration) or if at least 10% of blue‑collar workers have already been placed on temporary unemployment in the preceding quarter. The Minister of Employment can waive the need for an economic justification for specific firms or sectors. A minimum 14 days after filing for temporary unemployment, can white‑collar workers enter JRS (if approved by ONEM/RVA).
← 5. However, since the beginning of 2024, workers placed on temporary unemployment receive an additional EUR 5 per day for white‑collar workers and EUR 2 per day for blue‑collar workers placed on temporary unemployment, except where temporary unemployment is due to force majeure (or annual vacation and strike/lockout).
← 6. With 18% receiving top-ups, blue‑collar workers were more likely to receive these additional payments than the 11% of white‑collar workers.
← 7. At the end of 2020, the government also disbursed an additional support of EUR 10 for each day of temporary unemployment in 2020, with a guaranteed minimum payment of EUR 150.
← 8. Despite these barriers, around one in three long-term job retention support recipients still participated in training voluntarily (OECD, 2023[6]).
← 9. The linked employer-employee data is a rich quarterly panel dataset provided by the Belgian Crossroads Bank for Social Security (KSZ/BCSS), covering private sector non-agricultural dependent employment and spanning 2017Q1 to 2022Q4. The dataset comprises matched employer-employee administrative records covering a representative 10% sample of workers. Information on firm-level labour productivity, measured as value‑added per worker, is supplemented through data from the Belgian National Bank.
← 10. Note the uptick in the use of for economic reasons in September 2020 when access to the JRS coronavirus scheme was temporarily restricted to particularly hard-hit sectors.
← 11. The ease of access and the enhanced flexibility of the force majeure coronavirus variant may also have crowded out other benefits. For example, the inflow of sick pay insurance recipients fell by more than two‑thirds at the start of the pandemic and remained at this lower level throughout 2020. While social distancing and teleworking may have reduced the incidence of certain infectious diseases and commuter‑related road accidents, it is likely that the flexibility and broad accessibility of the simplified force majeure variant contributed to a substitution of sick pay insurance benefits with job retention benefits (Gelade and Saks, 2024[23]).
← 12. As the temporary unemployment bad weather scheme’s design and eligibility criteria are tailored to address the specific and recurring disruptions caused by adverse weather in the construction sector, including defined triggers and required documentation directly related to weather conditions, it likely remained the go-to scheme for construction firms during the pandemic. This preference was reinforced by the familiarity with the scheme and its conditions.
← 13. This was also associated with the extension of new force majeure scheme to the energy crisis, representing about 12% of force majeure claims from October to December 2022.
← 14. The correlation between job retention scheme take‑up and firm productivity, measured similar to the correlation between employment growth and firm productivity as in (OECD, 2025[19]), increased from 0.06 to 0.21.
← 15. Note that while Figure 2.3 presents global quintiles of the firm productivity distribution, the same qualitative patterns hold when instead considering within-industry quintiles.
← 16. The differences were relatively similar for the share of workers covered: experienced firms covered 17% of their workforce on average each quarter during the pandemic, compared to only 6% for firms without prior experience with temporary unemployment.
← 17. Additional evidence from Belgian microdata also reveals that workers placed on schemes were less likely to be full-time employees compared to those not placed on temporary unemployment. This holds within the same firms that used temporary unemployment and compared to firms that did not use it (see Figure A A.4). Further, persons with a foreign nationality were overrepresented among beneficiaries of temporary unemployment during the COVID‑19 pandemic in Belgium (FPS Employment, Labour and Social Dialogue, 2022[22]; Bevers et al., 2020[21]).
← 18. Job-to-job mobility refers to direct flows between jobs in different firms, which is more likely to be voluntary and often driven by career considerations, and employment mobility refers to flows in and out of employment, which is more likely to be involuntary or driven by personal considerations (e.g. labour force participation).
← 19. Growth-enhancing job reallocation is defined as the change in the structure of employment from less to more productive firms. In practice, it is measured by the coefficient from an employment-weighted firm-level regression of employment growth on firm-level labour productivity, after controlling for firm-level employment and a set of fixed effects. The analysis is restricted to firm active before the COVID‑19 pandemic. This methodology is based on Decker et al. (2020[20]) and applied in a similar framework on annual cross-country data in (Fluchtmann, Hijzen and Puymoyen (2025[19]).
← 20. Note that while Figure 2.8 presents global quintiles of the firm productivity distribution, the same qualitative patterns hold when instead considering within-industry quintiles.
← 21. This is done by focussing on the responsiveness of quarterly employment growth to productivity levels in a similar framework as used for Figure 2.8, while replacing coefficients on the quintiles of the firm-productivity distribution with coefficients directly on the productivity level of firms (see also Fluchtmann, Hijzen and Puymoyen (2025[19])). A positive correlation between firm employment growth and firm-level labour productivity levels suggests that the structure of employment shifts towards more productive firms and hence that reallocation is productivity-enhancing. The results are very similar when focussing on employment growth by quintile of the firm-level labour productivity distribution as done above.
← 22. Chapter 3 also considers the employment effects of job retention support during the COVID‑19 pandemic, and shows that while initially successful in preserving employment, the elevated take‑up of the Belgian job retention scheme had negative effects on employment as the crisis subsided.