Hiring subsidies, job creation and job destruction

Sagiri Kitao, Ayşegül Şahin and Joseph Song

Economics Letters, 2011, vol. 113, issue 3, 248-251

Abstract: We quantify the effects of hiring subsidies using the model of Mortensen and Pissarides (2003). The job creation effect can be large in a weak labor market. However, in the long-run, subsidies raise the wage and equilibrium unemployment.

Keywords: Employment; Unemployment; Hiring subsidy (search for similar items in EconPapers)
JEL-codes: E24 J65 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:113:y:2011:i:3:p:248-251

DOI: 10.1016/j.econlet.2011.08.001

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