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Subsidies for permanent employment in the time of Covid-19

Antonio Accetturo, Francesca Modena and Giacomo Ziglio ()
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Giacomo Ziglio: Bank of Italy

No 808, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: This paper analyses the impact of a regional policy aimed at fostering permanent employment after the COVID-19 recession. Using administrative micro data from the Italian private sector, we estimate the impact of subsidies on permanent employment by examining variations in their implementation across regions and over time. We find that, on average, the effect on the hiring of previously unemployed people is limited, but the impact on the conversion of fixed-term contracts to permanent ones is positive and sizeable. However, we observe that the average effect masks great heterogeneity across age groups, with young people - for whom subsidies were more generous - benefiting the most. Furthermore, we find no evidence that this regional policy encouraged employee poaching.

Keywords: Covid-19; Employment subsidies; Hiring; Place-based policy; Policy evaluation (search for similar items in EconPapers)
JEL-codes: J21 J41 J48 (search for similar items in EconPapers)
Date: 2023-10
New Economics Papers: this item is included in nep-ure
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