Subsidizing Domestic Services as a Tool to Fight Unemployment: Effectiveness and Hidden Costs
Elisabeth Leduc () and
Ilan Tojerow ()
Additional contact information
Elisabeth Leduc: Free University of Brussels
No 13544, IZA Discussion Papers from Institute of Labor Economics (IZA)
European countries have increasingly adopted wage subsidies for the sector of domestic services to reduce low-skilled unemployment. Yet, empirical evidence on their effectiveness is scarce. In this paper, we use Belgian administrative data to estimate how participation in the subsidized domestic services sector impacts the labour market outcomes of program participants. Our identification strategy rests on a dynamic event study difference-in-differences model combined with coarsened exact matching. Our findings indicate that such subsidies can be effective in reducing unemployment and inactivity, but only by increasing employment within the subsidized domestic services sector. We also find that program participation deteriorates physical health, thus increasing the worker's probability of claiming disability insurance benefits.
Keywords: wage subsidies; low-skilled workers; unemployment; disability; domestic services; personal and household services; female employment (search for similar items in EconPapers)
JEL-codes: J08 J24 J28 J38 (search for similar items in EconPapers)
Pages: 62 pages
New Economics Papers: this item is included in nep-eur, nep-hea and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp13544
Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Access Statistics for this paper
More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().