Long-term effects of hiring subsidies for low-educated unemployed youths

Andrea Albanese, Bart Cockx and Muriel Dejemeppe

Journal of Public Economics, 2024, vol. 235, issue C

Abstract: We use regression discontinuity design and difference-in-differences methods to estimate the impact of a one-time hiring subsidy for low-educated unemployed youths in Belgium during the recovery from the Great Recession. Within a year of unemployment, the subsidy increases job-finding in the private sector by 10 percentage points. Over six years, high school graduates secure 2.8 more quarters of private employment. However, they transition from public jobs and self-employment, resulting in no net increase in overall employment, albeit with better wages. High school dropouts experience no lasting benefits. Additionally, in tight labor markets near Luxembourg’s employment hub, the subsidy results in a complete deadweight loss.

Keywords: Hiring subsidies; Youth unemployment; Low-educated; Regression discontinuity design; Difference-in-differences; Spillover effects (search for similar items in EconPapers)
JEL-codes: C21 J08 J23 J24 J61 J64 J68 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Working Paper: Long-Term Effects of Hiring Subsidies for Low-Educated Unemployed Youths (2024)
Working Paper: Long-Term Effects of Hiring Subsidies for Low-Educated Unemployed Youths (2023)
Working Paper: Long-Term Effects of Hiring Subsidies for Low-Educated Unemployed Youths (2023)
Working Paper: Long-term effects of hiring subsidies for low-educated unemployed youths (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:235:y:2024:i:c:s0047272724000732

DOI: 10.1016/j.jpubeco.2024.105137

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