The employment effects of low-wage subsidies

Kristiina Huttunen, Jukka Pirttilä and Roope Uusitalo

Journal of Public Economics, 2013, vol. 97, issue C, 49-60

Abstract: Low-wage subsidies are often proposed as a solution to the unemployment problem among the low skilled but the empirical evidence on their effects is still scarce. This paper examines the employment effects of a Finnish payroll tax subsidy scheme, which is targeted at the employers of older, full-time, low-wage workers. The system's clear eligibility criteria open up an opportunity for a reliable estimation of the causal impacts of the subsidy scheme. Our results indicate that the subsidy system had no effect on the employment rate or wages of the eligible groups, but it increased slightly working hours among those already at work.

Keywords: Low-wage subsidies; Employment; Social security contributions (search for similar items in EconPapers)
JEL-codes: H24 J23 J68 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (79)

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Related works:
Working Paper: The Employment Effects of Low-Wage Subsidies (2010)
Working Paper: The Employment Effects of Low-Wage Subsidies (2010)
Working Paper: The employment effects of low-wage subsidies (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:97:y:2013:i:c:p:49-60

DOI: 10.1016/j.jpubeco.2012.09.007

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