Subsidized loans and firms’ employment outcomes: evidence from a province in Iran

Javad Nosratabadi

Journal of Development Effectiveness, 2025, vol. 17, issue 3, 297-317

Abstract: This paper evaluates a subsidized loan program by comparing firms’ actual and expected employment outcomes based on the loan amount received and invested. Using causal effect estimation and small-firm data from a province in Iran, the results reveal a specific range of loan amounts where actual employment aligns with expectations. Outside this range, discrepancies exist: expected employment is overestimated for loans exceeding 300 million Iranian Rial and underestimated for loans below 150 million Iranian Rial. However, the difference between actual and expected employment is not statistically significant, suggesting the program successfully created the expected number of jobs.

Date: 2025
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DOI: 10.1080/19439342.2025.2453691

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