Did job retention schemes save jobs during the COVID‐19 pandemic? Firm‐level evidence from Latvia

This study investigates the short‐ to medium‐term effects on employment of a job retention scheme (JRS) implemented during the COVID‐19 pandemic. Employing a unique Latvian firm‐level dataset, the study reveals a sustained positive impact of JRS participation on employment. Firms that participated in the first‐wave idle‐time allowance programme sustained higher employment levels relative to non‐participants. These effects were observed on both the extensive and intensive margins. The calculations suggest that the wage benefits of the JRS outweighed the costs, with the first‐wave idle‐time allowance programme's costs estimated between 2,260 and 5,950 euros per job–year saved.