The Effectiveness of Hiring Credits

Pierre Cahuc, Stéphane Carcillo () and Thomas Le Barbanchon
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Stéphane Carcillo: ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique
Thomas Le Barbanchon: CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - IP Paris - Institut Polytechnique de Paris - CNRS - Centre National de la Recherche Scientifique

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Abstract: This paper analyzes the effectiveness of hiring credits. Using comprehensive administrative data, we show that the French hiring credit, implemented during the Great Recession, had significant positive employment effects and no effects on wages. Relying on the quasi-experimental variation in labor cost triggered by the hiring credit, we estimate a structural search and matching model. Simulations of counterfactual policies show that the effectiveness of the hiring credit relied to a large extent on three features: it was nonanticipated, temporary and targeted at jobs with rigid wages. We estimate that the cost per job created by permanent hiring credits, either countercyclical or time-invariant, in an environment with flexible wages would have been much higher.

Keywords: Hiring credit; Labor demand; Search and matching model (search for similar items in EconPapers)
Date: 2019-03
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Citations: View citations in EconPapers (18)

Published in Review of Economic Studies, 2019, 86 (2), pp.593 - 626. ⟨10.1093/restud/rdy011⟩

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Related works:
Journal Article: The Effectiveness of Hiring Credits (2019)
Working Paper: The Effectiveness of Hiring Credits (2019)
Working Paper: The Effectiveness of Hiring Credits (2017)
Working Paper: The Effectiveness of Hiring Credits (2017)
Working Paper: The Effectiveness of Hiring Credits (2017)
Working Paper: The Effectiveness of Hiring Credits (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:spmain:hal-03391893

DOI: 10.1093/restud/rdy011

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