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How effective are hiring subsidies in reducing long-term unemployment among prime-aged jobseekers? Evidence from Belgium

How effective are hiring subsidies in reducing long-term unemployment among prime-aged... AbstractHiring subsidies are widely used to create (stable) employment for the long-term unemployed. This paper exploits the abolition of a hiring subsidy targeted at long-term unemployed jobseekers older than 45 years of age in Belgium to evaluate its effectiveness in the short and medium run. Based on a triple-difference methodology, the hiring subsidy is shown to increase the job-finding rate by 13% without any evidence of spillover effects. This effect is driven by a positive effect on individuals with at least a bachelor's degree. However, the hiring subsidy mainly creates temporary short-lived employment: eligible jobseekers are not more likely to find employment that lasts at least 12 consecutive months compared with ineligible jobseekers. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png IZA Journal of Labor Policy de Gruyter

How effective are hiring subsidies in reducing long-term unemployment among prime-aged jobseekers? Evidence from Belgium

IZA Journal of Labor Policy , Volume 12 (1): 1 – Jan 1, 2022
38 pages

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References (67)

Publisher
de Gruyter
Copyright
© 2022 Sam Desiere et al., published by Sciendo
ISSN
2193-9004
DOI
10.2478/izajolp-2022-0003
Publisher site
See Article on Publisher Site

Abstract

AbstractHiring subsidies are widely used to create (stable) employment for the long-term unemployed. This paper exploits the abolition of a hiring subsidy targeted at long-term unemployed jobseekers older than 45 years of age in Belgium to evaluate its effectiveness in the short and medium run. Based on a triple-difference methodology, the hiring subsidy is shown to increase the job-finding rate by 13% without any evidence of spillover effects. This effect is driven by a positive effect on individuals with at least a bachelor's degree. However, the hiring subsidy mainly creates temporary short-lived employment: eligible jobseekers are not more likely to find employment that lasts at least 12 consecutive months compared with ineligible jobseekers.

Journal

IZA Journal of Labor Policyde Gruyter

Published: Jan 1, 2022

Keywords: hiring subsidies; long-term unemployment; prime-aged jobseekers; triple difference; temporary help agencies; H22; J08; J18; J23; J38; J64; J65; J68

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