Employer Wage Subsidy Caps and Part-Time Work

Joel Elvery, Curtis Reynolds and Shawn M. Rohlin

ILR Review, 2023, vol. 76, issue 1, 189-209

Abstract: Using tract-level US Census data and triple-difference estimators, the authors test whether firms increase their use of part-time workers when faced with capped wage subsidies. By limiting the maximum subsidy per worker, such subsidies create incentives for firms to increase the share of their payroll that is eligible for the subsidy by increasing use of part-time or low-wage workers. Results suggest that firms located in federal Empowerment Zones in the United States responded to the program’s capped wage subsidies by expanding their use of part-time workers, particularly in locations where the subsidy cap is likely to bind. Results also show a shift toward hiring lower-skill workers.

Keywords: wage subsidies; hiring credits; part-time work; employer behavior; policy analysis (search for similar items in EconPapers)
Date: 2023
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Working Paper: Employer Wage Subsidy Caps and Part-Time Work (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:sae:ilrrev:v:76:y:2023:i:1:p:189-209

DOI: 10.1177/00197939221102865

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