Female-Targeted Hiring Subsidies, Firm Learning, and Women’s Employment

Mimosa Distefano, Lorenzo Incoronato and Anna Raute

No 21825, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Women often struggle to re-enter employment after career breaks, possibly because employers are uncertain about their productivity. We study whether hiring subsidies help firms overcome this uncertainty and hire from this group. Exploiting an Italian policy that temporarily cut payroll taxes for women hired from non-employment, we find that firms persistently hire more women with career breaks, including mothers, following subsidy adoption. Consistent with employer learning about target-group productivity, firms with better initial matches later hire more from this group. Subsidized workers also show stronger labor-market attachment. These findings suggest demand-side interventions can complement supply-side policies in addressing gender gaps.

Keywords: mothers; Hiring subsidies; Employer learning (search for similar items in EconPapers)
JEL-codes: D83 H25 J16 J23 (search for similar items in EconPapers)
Date: 2026-08
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