Long-Term Effects of Hiring Subsidies for Unemployed Youths-Beware of Spillovers

Andrea Albanese, Bart Cockx and Muriel Dejemeppe

No 2022019, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: We use (donut) regression discontinuity design and difference-in-differences estimators to estimate the impact of a one-shot hiring subsidy targeted at low-educated unemployed youths during the Great Recession recovery in Belgium. The subsidy increases job-finding in the private sector by 10 percentage points within one year of unemployment. Six years later, high school graduates accumulated 2.8 quarters more private employment. However, because they substitute private for public and self-employment, overall employment does not increase but is still better paid. For high school dropouts, no persistent gains emerge. Moreover, the neighboring attraction pole of Luxembourg induces a complete deadweight near the border.

Keywords: Hiring subsidies; youth unemployment; cross-border employment; regression discontinuity design; difference-in-differences; spillover effects; displacement (search for similar items in EconPapers)
JEL-codes: C21 J08 J23 J24 J61 J64 J68 (search for similar items in EconPapers)
Date: 2022-09-16
New Economics Papers: this item is included in nep-eur, nep-lab and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Long-Term Effects of Hiring Subsidies for Unemployed Youths—Beware of Spillovers (2022)
Working Paper: Long-Term Effects of Hiring Subsidies for Unemployed Youths - Beware of Spillovers (2022)
Working Paper: Long-Term Effects of Hiring Subsidies for Unemployed Youths—Beware of Spillovers (2022)
Working Paper: Long-Term Effects of Hiring Subsidies for Unemployed Youths - Beware of Spillovers (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:2022019

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