Permanent Wage Cost Subsidies for Older Workers: An Effective Tool for Increasing Working Time and Postponing Early Retirement?

Andrea Albanese and Bart Cockx

No 8988, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In several OECD countries age-targeted wage subsidies have been introduced to increase the employment of older workers, but evidence on their effectiveness is scarce. This paper examines the effects of a permanent wage cost subsidy in Belgium on the employment rate, working time and hourly wage. We estimate these effects by integrating Inverse Probability Weighting in a, possibly trend-adjusted, Difference-in-Differences of endogenously sampled repeated cross sections. We find small positive short-run impacts on working time and larger ones on the employment rate, but only for employees at high risk of leaving to early retirement. The wage is not affected.

Keywords: wage cost subsidies; older workers; weighted Difference-in-Differences; endogenous sampling (search for similar items in EconPapers)
JEL-codes: C21 J14 J18 J3 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2015-04
New Economics Papers: this item is included in nep-age, nep-eur and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Published - revised version published in: Labour Economics , 2019, 58, 145-166

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Related works:
Working Paper: Permanent Wage Cost Subsidies for Older Workers. An Effective Tool for Increasing Working Time and Postponing Early Retirement? (2015)
Working Paper: Permanent Wage Cost Subsidies for Older Workers. An Effective Tool for Increasing Working Time and Postponing Early Retirement? (2015)
Working Paper: PERMANENT WAGE COST SUBSIDIES FOR OLDER WORKERS. AN EFFECTIVE TOOL FOR INCREASING WORKING TIME AND POSTPONING EARLY RETIREMENT? (2015)
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