Shared-Work Programs Can Ease the Coronavirus’s Economic Impact

Workers in an industrial valve manufacturing factory

By Katharine G. Abraham and Susan N. Houseman

April 17, 2010

The COVID-19 outbreak is causing massive disruption to the U.S. economy, with more than 22 million workers filing unemployment insurance claims since mid-March. In such situations, layoffs are often seen as inevitable. But unless a business has been forced to close, there’s a way to keep workers on the payroll and ease the pain of a downturn. It’s called “work-sharing,” and 26 statescovering about 70 percent of the U.S. workforceoffer a work-sharing option in their unemployment insurance system.

Under a work-sharing plan, employers cut employees’ hours instead of laying off workers, while employees on reduced hours receive pro-rated unemployment benefits. Businesses benefit by retaining valued employees and avoiding recruitment and training costs when economic conditions return to normal. Workers benefit by retaining most of their income and access to health insurance.

Work-sharing is a crisis-mitigation tool we already have in our arsenal to fight this pandemic’s economic fallout. The CARES Act, passed March 27, provides full federal funding for states that already have work-sharing programs and half federal funding for states that adopt temporary work-sharing programs.

State and federal officials need to take steps now to ramp up its use. Presumptive Democratic presidential nominee Joe Biden, citing our research, called for expanding work-sharing programs to all 50 states. States with a shared-work option should get the word out to employers about the program and those without one should move quickly to adopt it.

Abraham is an economist at the University of Maryland and served as a Member of President Obama’s Council of Economic Advisers. Houseman is Vice-President and Director of Research at the Upjohn Institute for Employment Research.

Other research and resources on work-sharing


Susan N. Houseman headshot

Susan N. Houseman

Senior Economist

Research Topics: Unemployment Insurance