The effect of hiring subsidies on regular wages

Andreas Moczall
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Andreas Moczall: Institute for Employment Research (IAB), Nuremberg, Germany

No 201501, IAB-Discussion Paper from Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]

Abstract: "What happens to the wages of regular workers in establishments subsidized with hiring subsidies? Does hiring programme participants result in windfalls that are distributed among regular workers? Do these reduce their wage demands to avoid being substituted by subsidized workers? Using linked employer-employee data from Germany, I estimate the effects of subsidizing an establishment on regular workers' wages using spell fixed effects regression. I find that hiring subsidy schemes do increase the daily wages of regular workers by up to almost one per cent in the manufacturing sector. These effects are limited to large establishments and above median local unemployment rates. They occur within the establishment itself and are not merely the result of varying regional exposure to ALMP programmes. I conclude that hiring subsidies have a notable impact on regular workers beyond mere substitution." (Author's abstract, IAB-Doku) ((en))

Keywords: Bundesrepublik Deutschland; Auswirkungen; Beschäftigerverhalten; Betrieb; Eingliederungszuschuss; IAB-Linked-Employer-Employee-Datensatz; Lohnstruktur; arbeitsmarktpolitische Maßnahme (search for similar items in EconPapers)
JEL-codes: C23 H25 J38 J68 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2015
New Economics Papers: this item is included in nep-eur, nep-lab, nep-lma and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:iab:iabdpa:201501

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