A new GLO Discussion Paper estimates the impact of a one-shot hiring subsidy targeted at low-educated unemployed youths during the Great Recession in Belgium to find that in the long term private employment increased but just substituted public and self-employment.
GLO Discussion Paper No. 1168, 2022
Long-Term Effects of Hiring Subsidies for Unemployed Youths – Beware of Spillovers – Download PDF
by Albanese, Andrea & Cockx, Bart & Dejemeppe, Muriel
GLO Fellows Andrea Albanese & Muriel Dejemeppe
Author Abstract: We use (donut) regression discontinuity design and difference-in-differences estimators to estimate the impact of a one-shot hiring subsidy targeted at low-educated unemployed youths during the Great Recession recovery in Belgium. The subsidy increases job-finding in the private sector by 10 percentage points within one year of unemployment. Six years later, high school graduates accumulated 2.8 quarters more private employment. However, because they substitute private for public and self-employment, overall employment does not increase but is still better paid. For high school dropouts, no persistent gains emerge. Moreover, the neighboring attraction pole of Luxembourg induces a complete deadweight near the border.
PUBLISHED
Vol. 35, Issue 4, October 2022: Journal of Population Economics (JOPE): 15 articles https://link.springer.com/journal/148/volumes-and-issues/35-4
CiteScore of JOPE moves up from 3.9 (2020) to 6.5 (2021). LINK
Similar, its Impact Factor is now 4.7 (2021) after 2.8 (2020)! LINK
GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS, EconPapers). Complete list of all GLO DPs – downloadable for free.
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