De Economist

, Volume 161, Issue 3, pp 307–329 | Cite as

Dilemmas of Downsizing During the Great Recession: Crisis Strategies of European Employers

Article

Abstract

The present paper analyzes the choices faced by European employers when threatened with the prospect of the mass lay-off of their employees as a result of the Great Recession. By means of a representative survey among employers in Italy, Germany, Denmark, Poland, the Netherlands and Sweden in 2009, we show that employers mainly prefer to tackle such threats by offering short-time work, and by early retirement packages to older workers, in conjunction with buy-outs. The latter preference is particularly visible in countries where employers perceive the level of employment protection to be high. The only notable exception is Denmark, where employers prefer to reduce working hours. In general, a sense of generational fairness influences downsizing preferences, with those employers who favor younger workers particularly likely to use early retirement and buy-outs when downsizing, followed by working time reductions. Wage reductions and administrative dismissal are less favored by European employers. In particular, CEOs and owners are more inclined than lower-level managers to cut wages.

Keywords

Downsizing Early retirement Fairness Older workers Recession 

JEL Classification

D2 J63 J23 J26 

Notes

Acknowledgments

Constructive comments by two anonymous referees are gratefully acknowledged.

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Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.Netherlands Interdisciplinary Demographic Institute (NIDI)The HagueThe Netherlands
  2. 2.Tilburg University, Tilburg School of Economics and Management (TISEM) and CentERTilburgThe Netherlands
  3. 3.Department of Anthropology and SociologyUniversity of AmsterdamAmsterdamThe Netherlands

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