Work Sharing during the Great Recession

Work Sharing during the Great Recession

New Developments and Beyond

Edited by Jon C. Messenger and Naj Ghosheh

‘Work sharing’ is a labour market instrument devised to distribute a reduced volume of work to the same (or similar) number of workers over a diminished period of working time in order to avoid redundancies. This fascinating and timely study presents the concept and history of work sharing and explores the complexities and trade-offs involved in its use as both a strategy for preserving jobs and a policy for increasing employment.

Chapter 1: An introduction to work sharing: A strategy for preserving jobs, creating new employment and improving individual well-being

Jon C. Messenger and Naj Ghosheh

Subjects: economics and finance, labour economics, public sector economics, social policy and sociology, labour policy


The global financial crisis that first hit the United States (which was already in a recession) in the autumn of 2008, and then the rest of the world shortly thereafter, can be likened to a ‘shock wave’. A massive wave of reduced liquidity in the financial sector unleashed by the dramatic collapse of Lehman Brothers generated a negative macroeconomic shock which drove down aggregate demand in countries around the world to a degree unseen since the Great Depression: credit markets froze, bringing lending to a virtual standstill, halting business investment, and driving consumer spending into a downward spiral. Thus, the economic ‘shock wave’ emanating from the financial sector had a profound effect on the ‘real’ global economy as well: for example, 28 of the 30 OECD countries were hit by a recession, and that recession was greater than the historical average in the depth of its impact on GDP in all but five OECD countries, the Czech Republic, Greece, the Republic of Korea, New Zealand and Switzerland (OECD 2010: 33). And the impact on GDP was not limited to the developed world, but stretched around the globe from China to Latin America – turning the global financial crisis into the Great Recession of 2008–09.