labor market institutions are similar and their unemployment rates just before the crisis were both around 8%. Yet, in …This paper analyzes the strikingly different response of unemployment to the Great Recession in France and Spain. Their … France, unemployment rate has increased by 2 percentage points, whereas in Spain it has shot up to 19% by the end of 2009. We …

large sector-specific shocks. However, the latter shows much less labor reallocation because ERTEs were available to firms …. We show that ERTEs stabilize unemployment rates by allowing workers to remain with their employers in highly affected … sectors. However, they crowd-out labor hoarding of employers, increase the volatility of the rate of people working and …