The Employment Effects of Low-Wage Subsidies

Kristiina Huttunen, Jukka Pirttilä and Roope Uusitalo

No 3043, CESifo Working Paper Series from CESifo

Abstract: Low-wage subsidies are often proposed as a solution to the unemployment problem among the low skilled. Yet the empirical evidence on the effects of low-wage subsidies is surprisingly 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, using a difference-in-difference-in-differences approach. Our results indicate that the subsidy system had no effects on the employment rate. However, it appears to have increased the probability of part-time workers obtaining full-time employment.

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: 2010
References: Add references at CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: The employment effects of low-wage subsidies (2013)
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:ces:ceswps:_3043

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