Home Business & Economics Fair Choices During COVID-19: Firms’ Altruism and Inequality Aversion in Managing a Large Short-Time Work Scheme
Article
Licensed
Unlicensed Requires Authentication

Fair Choices During COVID-19: Firms’ Altruism and Inequality Aversion in Managing a Large Short-Time Work Scheme

  • Paola Biasi , Maria De Paola EMAIL logo and Paolo Naticchioni
Published/Copyright: May 22, 2025
The B.E. Journal of Economic Analysis & Policy
From the journal The B.E. Journal of Economic Analysis & Policy Volume 25 Issue 3

Abstract

Leveraging a unique dataset encompassing choices made by the entire universe of Italian manufacturing firms regarding a short-time work scheme (STW), we investigate the impact of the pandemic’s relative local severity on firms’ altruistic tendencies and preferences towards inequality. We use the decision to advance income support payments to workers as a measure of firm altruism and the choice concerning the concentration of STW working hours among the workforce as a gauge of inequality preferences. Adopting a natural experiment-like approach, we find that, controlling for regional and industry fixed effects, in areas more severely hit by the pandemic firms were more likely to advance the STW payment to their employees and to opt for a lower STW concentration. The effects we find are larger for firms characterized by more intense ties between entrepreneurs and workers, suggesting that the pandemic has mainly enhanced parochial pro-social behaviour.

Keywords: COVID-19; altruism; inequality aversion; labour market; firm dynamics
JEL Classification: D22; D91; I14
Corresponding author: Maria De Paola, Italian National Institute of Social Security (INPS), Rome, Italy; Department of Economics, Statistics and Finance, University of Calabria, via Pietro Bucci – 87036, Arcavacata di Rende (CS), Italy; and Institute for the Study of Labor (IZA), Bonn, Germany, E-mail:

Acknowledgements

We thank Edoardo Di Porto, Alessandro Fedele, Monica Paella, Alessandro Tondini, Mirco Tonin, as well as participants to the AIEL conference (Salerno), the Welfare and Policy Conference (Bordeaux), the Astril Conference (Rome), The DIS-RED workshop (University of Calabria). The findings and conclusions expressed are solely those of the authors and do not represent the views of INPS. Declarations of interest: none.

Appendix
Table A1:

Placebo Tests. The Impact of EMj and EM2019ij on firm altruistic and equity attitudes in managing the 2019 STW.

Advance payment HHI
(1) (2) (3) (4)
Excess mortality 2019 (LMA) 0.006 −0.077
(0.007) (2.666)
Excess mortality (LMA) 0.000 −0.572
(0.001) (0.375)
Observations 21613 21613 6475 6475
R2 0.119 0.119 0.174 0.175
Intensity ventiles Yes Yes Yes Yes
Regional#Ateco FE Yes Yes Yes Yes
Firm characteristics Yes Yes Yes Yes
Y mean 0.990 0.990 15.888 15.888
X SD 0.094 0.729 0.088 0.790

  1. OLS estimates. Standard errors (corrected for heteroskedasticity) and clustered at LMA level are reported in parentheses. The symbols ***, **, * indicate that the coefficients are statistically significant at the 1, 5 and 10 percent level, respectively.

Table A2:

The Impact of the COVID-19 severity on the probability of advance payment by the firm and on STWHHI without controlling for STW Intensity.

Advance payment HHI
(1) (2) (3) (4)
Excess mortality (LMA) 0.025*** 0.022*** −0.334** −0.259*
(0.007) (0.006) (0.153) (0.140)
Observations 177071 175336 63175 62458
R2 0.241 0.241 0.115 0.115
Regional#Ateco FE Yes Yes Yes Yes
Firm characteristics Yes Yes Yes Yes
LMA characteristics No Yes No Yes
Y mean 0.434 0.430 12.629 12.631
X SD 0.799 0.802 0.870 0.874

  1. OLS estimates. Standard errors (corrected for heteroskedasticity) and clustered at LMA level are reported in parentheses. The symbols ***, **, * indicate that the coefficients are statistically significant at the 1, 5 and 10 percent level, respectively.

Table A3:

The Impact of the COVID-19 on firm altruism and inequality aversion controlling for a first and a second polynomial of STW intensity.

Advance payment HHI
(1) (2) (3) (4)
Excess mortality (LMA) 0.021*** 0.020*** −0.214* −0.207*
(0.006) (0.006) (0.127) (0.109)
Intensity −0.124*** −0.539*** −20.405*** −87.000***
(0.010) (0.035) (0.640) (1.974)
Intensity^2 0.485*** 87.363***
(0.034) (2.541)
Observations 175336 175336 62458 62458
R2 0.245 0.248 0.162 0.218
Regional#Ateco FE Yes Yes Yes Yes
Firm characteristics Yes Yes Yes Yes
LMA characteristics No Yes No Yes
Y mean 0.430 0.430 12.631 12.631
X SD 0.802 0.802 0.874 0.188

  1. OLS estimates. Standard errors (corrected for heteroskedasticity) and clustered at LMA level are reported in parentheses. The symbols ***, **, * indicate that the coefficients are statistically significant at the 1, 5 and 10 percent level, respectively.

Table A4:

The Impact of the COVID-19 severity on firm altruism and inequality aversion, by macro area.

Advance payment HHI
North Center-South North Center-South
(1) (2) (3) (4)
Excess mortality (LMA) 0.019*** 0.041** −0.358*** 0.039
(0.007) (0.018) (0.123) (0.337)
Observations 74445 102626 31862 31310
R2 0.153 0.238 0.241 0.256
Intensity ventiles Yes Yes Yes Yes
Regional#Ateco FE Yes Yes Yes Yes
Firm characteristics Yes Yes Yes Yes
LMA characteristics Yes Yes Yes Yes
Y mean 0.599 0.313 11.259 14.024
X SD 0.976 0.334 1.013 0.387

  1. OLS estimates. Standard errors (corrected for heteroskedasticity) and clustered at LMA level are reported in parentheses. The symbols ***, **, * indicate that the coefficients are statistically significant at the 1, 5 and 10 percent level, respectively.

Table A5:

The Impact of the COVID-19 severity (EM 70+) on firm altruism and inequality aversion.

Advance payment HHI
(1) (2) (3) (4)
Excess mortality 70+ (LMA) 0.020*** 0.018*** −0.311*** −0.207*
(0.006) (0.005) (0.109) (0.107)
Observations 177071 175336 63175 62458
R2 0.264 0.264 0.246 0.247
Intensity ventiles Yes Yes Yes Yes
Regional#Ateco FE Yes Yes Yes Yes
Firm characteristics Yes Yes Yes Yes
LMA characteristics No Yes No Yes
Y mean 0.434 0.430 12.629 12.631
X SD 0.847 0.849 0.921 0.925

  1. OLS estimates. Standard errors (corrected for heteroskedasticity) and clustered at LMA level are reported in parentheses. The symbols ***, **, * indicate that the coefficients are statistically significant at the 1, 5 and 10 percent level, respectively.

Table A6:

The Impact of the COVID-19 severity at municipal level on firm altruism and inequality aversion.

Advance payment HHI
(1) (2) (3) (4)
Excess mortality (municipality) 0.012*** 0.011*** −0.209*** −0.154***
(0.003) (0.002) (0.056) (0.058)
Observations 177055 175320 63173 62456
R2 0.264 0.264 0.246 0.247
Intensity ventiles Yes Yes Yes Yes
Regional#Ateco FE Yes Yes Yes Yes
Firm characteristics Yes Yes Yes Yes
LMA characteristics No Yes No Yes
Y mean 0.434 0.430 12.629 12.631
X SD 0.985 0.985 1.066 1.067

  1. OLS estimates. Standard errors (corrected for heteroskedasticity) and clustered at LMA level are reported in parentheses. The symbols ***, **, * indicate that the coefficients are statistically significant at the 1, 5 and 10 percent level, respectively.

Table A7:

The impact of the COVID-19 severity on firm altruism. Heterogeneity according to STW intensity.

STW intensity below/equal median STW intensity above median
(1) (2) (3) (4)
Excess mortality (LMA) 0.019*** 0.015*** 0.027*** 0.026***
(0.006) (0.005) (0.009) (0.008)
Observations 88499 87495 88512 87779
R2 0.273 0.274 0.156 0.153
Intensity ventiles Yes Yes Yes Yes
Regional#Ateco FE Yes Yes Yes Yes
Firms characteristics Yes Yes Yes Yes
LMA characteristics No Yes No Yes
Y mean 0.563 0.559 0.305 0.301
X SD 0.857 0.861 0.722 0.724

  1. OLS estimates. Standard errors (corrected for heteroskedasticity) and clustered at LMA level are reported in parentheses. The symbols ***, **, * indicate that the coefficients are statistically significant at the 1, 5 and 10 percent level, respectively.

References

Adena, M., and J. Harke. 2022. “COVID-19 and Pro-Sociality: How Do Donors Respond to Local Pandemic Severity, Increased Salience, and Media Coverage?” Experimental Economics 25 (3): 824–44. https://doi.org/10.1007/s10683-022-09753-y.Search in Google Scholar

Akerlof, G. A. “Labor Contracts as Partial Gift Exchange.” The Quarterly Journal of Economics 97 (4): 543–69. https://doi.org/10.2307/1885099.Search in Google Scholar

Altonji, J. G., T. E. Elder, and C. R. Taber. 2005. “Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools.” Journal of Political Economy 113 (1): 151–84.10.1086/426036Search in Google Scholar

Bapuji, H., C. Patel, G. Ertug, and D. G. Allen. 2020. “Corona Crisis and Inequality: Why Management Research Needs a Societal Turn.” Journal of Management 46 (7): 1205–22. https://doi.org/10.1177/0149206320925881.Search in Google Scholar

Belot, M., J. Boone, and J. Van Ours. 2007. “Welfare-Improving Employment Protection.” Economica 74: 381–96. https://doi.org/10.1111/j.1468-0335.2006.00576.x.Search in Google Scholar

Brañas-Garza, P., D. Jorrat, A. Alfonso, A. M. Espín, T. G. Muñoz, and J. Kovářík. 2022. “Exposure to the COVID-19 Pandemic Environment and Generosity.” Royal Society Open Science 9 (1): 210919. https://doi.org/10.1098/rsos.210919.Search in Google Scholar

Brandt, A., S. M. Chan, M. Dewar, C. DiMari, S. A. Koch, and F. M. Johns, 2020. “The Heroism of Health Workers in the Coronavirus Crisis.” The New York Times. https://www.nytimes.com/2020/03/26/opinion/letters/coronavirus-health-care.html.Search in Google Scholar

Brown, P. H., and J. H. Minty. 2008. “Media Coverage and Charitable Giving after the 2004 Tsunami.” Southern Economic Journal 75 (1): 9–25. https://doi.org/10.1002/j.2325-8012.2008.tb00889.x.Search in Google Scholar

Cappelen, A. W., R. Falch, E. Ø. Sørensen, and B. Tungodden. 2021. “Solidarity and Fairness in Times of Crisis.” Journal of Economic Behavior & Organization 186: 1–11. https://doi.org/10.1016/j.jebo.2021.03.017.Search in Google Scholar

Cassar, A., A. Healy, and C. von Kessler. 2017. “Trust, Risk, and Time Preferences after a Natural Disaster: Experimental Evidence from Thailand.” World Development 94: 90–105. https://doi.org/10.1016/j.worlddev.2016.12.042.Search in Google Scholar

Castillo, M., and M. Carter. 2011. Behavioral Responses to Natural Disasters. Unpublished manuscript https://www3.gmu.edu/schools/chss/economics/icesworkingpapers.gmu.edu/pdf/1026.pdf?gmuw-rd=sm&gmuw-rdm=ht.Search in Google Scholar

Choi, J.-K., and S. Bowles. 2007. “The Coevolution of Parochial Altruism and War.” Science 318 (5850): 636–40, https://doi.org/10.1126/science.1144237.Search in Google Scholar

Di Porto, E., P. Naticchioni, and V. Scrutinio. 2022. “Lockdown, Essential Sectors, and Covid-19: Lessons from Italy.” Journal of Health Economics 81. https://doi.org/10.1016/j.jhealeco.2021.102572.Search in Google Scholar

Eccles, R. G., I. Ioannou, and G. Serafeim. 2014. “The Impact of Corporate Sustainability on Organizational Processes and Performance.” Management Science 60 (11): 2835–57. https://doi.org/10.1287/mnsc.2014.1984.Search in Google Scholar

Eisensee, T., and D. Strömberg. 2007. “News Droughts, News Floods, and us Disaster Relief.” The Quarterly Journal of Economics 122 (2): 693–728. https://doi.org/10.1162/qjec.122.2.693.Search in Google Scholar

Freeman, R. E., J. S. Harrison, A. C. Wicks, B. L. Parmar, and S. De Colle. 2010. Stakeholder Theory. The State of the Art. New York: Cambridge University Press.10.1017/CBO9780511815768Search in Google Scholar

Giupponi, G., C. Landais, and A. Lapeyre. 2022. “Should We Insure Workers or Jobs during Recessions?” Journal of Economic Perspectives 36 (2): 29–54. https://doi.org/10.1257/jep.36.2.29.Search in Google Scholar

Grimalda, G., N. R. Buchan, O. D. Ozturk, A. C. Pinate, G. Urso, and M. B. Brewer. 2021. “Exposure to COVID-19 Is Associated with Increased Altruism, Particularly at the Local Level.” Scientific Reports 11 (1): 18950. https://doi.org/10.1038/s41598-021-97234-2.Search in Google Scholar

Guerrero, L. R., A. C. Avgar, E. Phillips, and M. R. Sterling. 2020. “They Are Essential Workers Now, and Should Continue to Be: Social Workers and Home Health Care Workers during COVID-19 and beyond.” Journal of Gerontological Social Work 63 (6-7): 574–6. https://doi.org/10.1080/01634372.2020.1779162.Search in Google Scholar

Jayaraman, R., M. Kaiser, and M. Teirlinck. 2021. Charitable Donations to Natural Disasters: Evidence from an Online Platform. https://www.dropbox.com/s/j51qpkqhaf8tgkc/draft_2023_01.pdf?dl=0.Search in Google Scholar

Lohmann, P., E. Gsottbauer, J. You, and A. Kontoleon. 2020. “Social Preferences and Economic Decision-Making in the Wake of COVID-19: Experimental Evidence from China.” SSRN 3705264. Available at SSRN: https://ssrn.com/abstract=3705264.10.2139/ssrn.3705264Search in Google Scholar

Mironova, V., and S. Whitt. 2021. “Conflict and Parochialism Among Combatants and Civilians: Evidence from Ukrain.” Journal of Economic Psychology 86. https://doi.org/10.1016/j.joep.2021.102425.Search in Google Scholar

Oster, E. 2019. “Unobservable Selection and Coefficient Stability: Theory and Evidence.” Journal of Business & Economic Statistics 37 (2): 187–204. https://doi.org/10.1080/07350015.2016.1227711.Search in Google Scholar

Pinsker, J., 2020. “The Pandemic Will Cleave America in Two.” The Atlantic. https://www.theatlantic.com/family/archive/2020/04/two-pandemics-us-coronavirus-inequality/609622/.Search in Google Scholar

Porter, M. E., and M. R. Kramer. 2011. “Creating Shared Value.” Harvard Business Review 89 (1/2): 62–77.Search in Google Scholar

Scharf, K., S. Smith, and M. Ottoni-Wilhelm. 2022. “Lift and Shift: The Effect of Fundraising Interventions in Charity Space and Time.” American Economic Journal: Economic Policy 14 (3): 296–321. https://doi.org/10.1257/pol.20180679.Search in Google Scholar

Shachat, J., M. J. Walker, and L. Wei. 2021. “How the Onset of the Covid-19 Pandemic Impacted Pro-social Behaviour and Individual Preferences: Experimental Evidence from China.” Journal of Economic Behavior & Organization 190: 480–94. https://doi.org/10.1016/j.jebo.2021.08.001.Search in Google Scholar

Strömberg, D. 2007. “Natural Disasters, Economic Development, and Humanitarian Aid.” Journal of Economic Perspectives 21 (3): 199–222. https://doi.org/10.1257/jep.21.3.199.Search in Google Scholar

The Left. 2020. Grassroots solidarity in times of corona crisis. European United Left/Nordic Green Left. https://www.guengl.eu/grassroots-solidarity-in-times-of-corona-crisis/.Search in Google Scholar
Received: 2024-10-23
Accepted: 2025-03-28
Published Online: 2025-05-22

© 2025 Walter de Gruyter GmbH, Berlin/Boston

Articles in the same Issue

  1. Frontmatter
  2. Research Articles
  3. Fair Choices During COVID-19: Firms’ Altruism and Inequality Aversion in Managing a Large Short-Time Work Scheme
  4. Inequality in Health Status During the COVID-19 in the UK: Does the Impact of the Second Lockdown Policy Matter?
  5. The Political Timing of Tax Policy: Evidence from U.S. States
  6. Is it a Matter of Skills? High School Choices and the Gender Gap in STEM
  7. Patent Licensing and Litigation
  8. Class Size, Student Disruption, and Academic Achievement
  9. Political Orientation and Policy Compliance: Evidence from COVID-19 Mobility Patterns in Korea
  10. Social Efficiency of Free Entry in a Vertically Related Industry with Cost and Technology Asymmetry
  11. Carbon Tax with Individuals’ Heterogeneous Environmental Concerns
  12. Equitable Redistribution and Inefficiency under Credit Rationing
  13. Letters
  14. Psychological Well-Being of Only Children: Evidence from the One-Child Policy
  15. Peer Effects in Child Work Decisions: Evidence from PROGRESA Cash Transfer Program
  16. Right Time to Focus? Time of Day and Cognitive Performance
  17. Employee Dissatisfaction and Intentions to Quit: New Evidence and Policy Recommendations
  18. On the Stability of Common Ownership Arrangements
https://doi.org/10.1515/bejeap-2024-0369
Keywords for this article
COVID-19; altruism; inequality aversion; labour market; firm dynamics

Articles in the same Issue

  1. Frontmatter
  2. Research Articles
  3. Fair Choices During COVID-19: Firms’ Altruism and Inequality Aversion in Managing a Large Short-Time Work Scheme
  4. Inequality in Health Status During the COVID-19 in the UK: Does the Impact of the Second Lockdown Policy Matter?
  5. The Political Timing of Tax Policy: Evidence from U.S. States
  6. Is it a Matter of Skills? High School Choices and the Gender Gap in STEM
  7. Patent Licensing and Litigation
  8. Class Size, Student Disruption, and Academic Achievement
  9. Political Orientation and Policy Compliance: Evidence from COVID-19 Mobility Patterns in Korea
  10. Social Efficiency of Free Entry in a Vertically Related Industry with Cost and Technology Asymmetry
  11. Carbon Tax with Individuals’ Heterogeneous Environmental Concerns
  12. Equitable Redistribution and Inefficiency under Credit Rationing
  13. Letters
  14. Psychological Well-Being of Only Children: Evidence from the One-Child Policy
  15. Peer Effects in Child Work Decisions: Evidence from PROGRESA Cash Transfer Program
  16. Right Time to Focus? Time of Day and Cognitive Performance
  17. Employee Dissatisfaction and Intentions to Quit: New Evidence and Policy Recommendations
  18. On the Stability of Common Ownership Arrangements
Sign up now to receive a 20% welcome discount
Institutional Access
How does access work?
Have an idea on how to improve our website?
Please write us.
© 2025 De Gruyter Brill
Downloaded on 21.12.2025 from https://www.degruyterbrill.com/document/doi/10.1515/bejeap-2024-0369/html
Scroll to top button