Subsidy for wages can protect jobs, say Bank researchers

Temporary wage subsidies to stop companies laying off staff in a recession are an effective tool against joblessness, Bank of England researchers have said in analysis that might feed into the policy response to a no-deal Brexit. On its Bank Underground blog, the Bank published a study of “short-time work” (STW) schemes, which are used in other European countries to stabilise the economy in a shock. The researchers found that “the presence of STW schemes can reduce the fall in employment brought on by a recession”.