EINDHOVEN, The Netherlands -- Production at DAF Trucks NV here has dropped by more than half in the past year, but the truck maker has kept nearly 80% of its full-time staff with state help.

"It beats being unemployed," says 57-year-old Theo Witkamp, who operates computer-controlled cutting machines at DAF Trucks, a unit of Bellevue, Wash.-based Paccar Inc. PCAR -1.01% Although his hours have been cut, he is making 85% of his regular wages through a combination of state and company contributions.

The Netherlands, Germany and Austria have all relied heavily on so-called short-work programs to keep people in their jobs in the wake of the financial crisis. All three have managed to keep unemployment from soaring, but the Dutch have been particularly effective. At 3.7% in October, according to the European Union statistics office, the country's jobless rate is one of the lowest among the world's wealthy nations.

Workers on the assembly line at the DAF Trucks plant in Eindhoven, the Netherlands. Adam Cohen/The Wall Street Journal

"A lot of countries are using measures to support employment, but the Dutch might be the most successful," says Stefano Scarpetta, head of the employment-policy division at the Organization for Economic Cooperation and Development in Paris.

Norway, which has a lower jobless rate than the Netherlands, has used its oil wealth to bolster employment.

In the U.S., persistently high unemployment rates and the reluctance of employers to hire even though the economy is growing again has sparked interest, particularly on the left, on fashioning government subsidies like those common in Europe to discourage layoffs and encourage hiring. Paul Krugman, the Princeton University Nobel Prize-winning economist, has written, "These measures didn't prevent a nasty recession, but Germany got through the recession with remarkably few job losses."

The Netherlands has poured roughly €2 billion ($2.9 billion) into its jobs programs over the past year. But some say the country's low unemployment owes more to conservative practices before the financial crisis than to the programs put in place later. And they worry that the spending strain on the country's budget -- expected to swing to a deficit of 4.7% of gross domestic product this year from a 0.7% surplus in 2008 -- undercuts a strength that has helped it weather the downturn.

Short-work measures were written into Dutch law during the Nazi occupation and retained after World War II, but have been used only sparingly. The Dutch avoided subsidizing employment when the economy was expanding. Temporary work -- hiring workers on limited contracts -- was encouraged, increasing firms' ability to hire and fire.

Germany and France -- countries that have resisted temporary work contracts and have used short-hours programs regularly -- have never managed to rival the Netherlands' low unemployment rates even during economic upswings. In Germany, the frequent use of short work, or kurzarbeit, in the 1990s also didn't prevent companies from eventually laying off workers they couldn't afford, Mr. Scarpetta says.

In recent years, the Netherlands weaned people from unemployment benefits with sometimes controversial measures such as tougher screening that cut disability claims to 20,000 last year -- a fifth of what they were in 2002. Before the downturn, the Dutch jobless rate was around 2.7%, and companies brought in workers from Eastern Europe to fill vacancies.

After the crisis hit, the Dutch government, labor unions and employers quickly reached an agreement to begin payroll subsidies. Some likened the cooperation to the "polder model" that some historians say has origins in the Middle Ages, when people from rival Dutch cities and different social classes banded together to shore up dikes when floods threatened.

Piet Hein Donner, Dutch Minister for Social Affairs and Employment, says the jobs measures aimed to prevent companies from having an "overreaction" to the financial crisis, laying off skilled workers they would have to rehire when the economy picked up.

Some critics slam the short-work measures. Rick Van der Ploeg, an economics professor at Oxford University and a former Dutch politician, calls them a form of "creeping communism." He adds, "This is sharing poverty, pure and simple."

Even some who backed the programs have doubts. Dutch Finance Minister Wouter Bos worries about the effect of state aid. "It makes it harder for the market to determine which companies should survive and which should be allowed to fail," he says.

But it is worth the risk if the program keeps employees in jobs long enough for a recovery to take hold, Mr. Bos says. "You put in some extra money at an early stage, but then you save some money later because people don't have to go for unemployment [benefits]," he says.

To qualify for the first short-work program that started last November, a company had to show a 30% drop in revenue over a two-month period. The government paid workers all the wages they lost due to the reduction of their hours. More than 2,000 companies applied, and the state paid for more than 2.4 million hours of work at a cost of around €200 million. The subsidy, limited to a six-month period, was available until the end of April.

At the same time, the government set up a network of advisers to work with companies. The companies, from large corporations to family-owned businesses, get help deciding whether to use state-funded programs to avoid job cuts. When layoffs can't be avoided, the team helps workers find new jobs.

In late April, another program known as "part-time unemployment" kicked in, which didn't require companies to show a big revenue drop.

Under this €1 billion plan, employers can reduce workers' hours and salaries by as much as half, and the state makes up 70% of the lost wages.

At first this second phase was perhaps too attractive: After some companies began using it for all their workers, sending the state a hefty bill for wage subsidies, Mr. Donner this summer put stricter limits on the number of working hours it covers and the duration of the aid.

More than 1,500 companies are enrolled in the program, which runs from nine to 15 months. At DAF Trucks, companies and unions agreed to provide more pay than the government required.

Eindhoven-based ASML Holding NV, which makes photolithography devices for the semiconductor industry, used the short-work option for 1,100 workers until it expired in mid-June. The company's orders picked up in the second half of the year, and it didn't seek further state support.

"We now have enough work to keep our people going," says company spokeswoman Jojanneke Strijbos.

Write to Adam Cohen at adam.cohen@dowjones.com