Bank of Spain warns ERTE loses job retention effectiveness if extended over time

However, if the period is extended, the institution ERTEs “tend to reduce their effectiveness”, especially among certain groups of workers, such as the youngest, those on temporary contracts, or those working in certain service activities.

So between 2020 and 2021 myERTEs were widely used to overcome the economic crisis. Pandemic, The absolute probability of returning to work at ERTE was “high” on average, although it decreased with time.

In particular, the business points out that the effectiveness of ERTE is measured as the proportion of those affected who return to active work in the next quarter. increases from almost 65% for workers affected by a quarter of ERTE to 41.1% in the case of a six-month ERTE and to 26.2% for one day.and nine months long.

ERTE has come to provide coverage in Spain. plus 3.5 million workers in the period immediately after the arrival of the pandemic, but currently, with data for October of this year, this tool only covers 20,000 workers.

In the second quarter of 2020, Almost 20% of those employed were affected by an ERTE on employment suspension, pThis percentage fell sharply as health improved, reaching 0.3% of employment in the last quarter of 2021.

The incidence of ERTE was slightly higher among youth and workers with lower levels of education. and much higher in services most affected by the pandemic’s restrictions, such as hospitality and entertainment.

“ERTEs have been a viable mechanism to preserve the value of working relationships, and their effectiveness, both absolute and relative, is greater for short periods of time.” indicates the institution.

However, once the most severe stages of a crisis have passed, the Bank of Spain warns that continuing in an ERTE situation “could damage workers’ job prospects” because itn because of the “deterrent” and prolonged inactivity to seek another job”This could mean depreciation of job skills that do not compensate for the value of the employment relationship sought to be preserved”.

In this article, the agency compares the situation of workers in ERTE with those of the unemployed or idle and concludes: the probability of returning to work is “always significantly higher for people in ERTE”, relative to the latter.

This is for The agency confirms ERTE’s effectiveness in the Covid crisis when it comes to promoting the reinstatement of affected workers.

However, the magnitude of this difference A decreasing profile as the duration of ERTE states increases or unemployment/inactivity, falling from 28.7 points one quarter to under-half (13.4 points) after three.

According to the Bank of Spain, this is “As the conditions that led to the use of this tool persist, the relative effectiveness of ERTE decreases in favor of labor reinstatement.”

For example, The increase in the employability of men in ERTE is greater than that of women, but only for short periods of ERTE, because in men, the effect is “decreased more severely” as it prolongs over time.

On the other hand, the institution states that the effect is greater and permanent as the age of the employee increases, and that it is greater and more permanent for permanent contracts than for temporary contracts. Decline by education level DEFER activity to ensure that labor reinstatement is more intense in less qualified individuals.

According to the sectors, the relative effectiveness of ERTEs is greater and more permanent in the industry, while for some service branches, Employability after three quarters in ERTE is “already indistinguishable” from that of an equivalent unemployed or inactive person not covered by an ERTEIt highlights the Bank of Spain.

However, the governing bodyTo Pablo Hernandez de Cos warns that these results should be interpreted with some caution as greater data availability is expected.