Long-Term Effects of Hiring Subsidies for Low-Educated Unemployed Youths

Andrea Albanese, Bart Cockx and Muriel Dejemeppe

No 16153, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We use a regression discontinuity design and difference-in-differences estimators to estimate the impact of a one-shot hiring subsidy for 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, they substitute private for public and self-employment; thus, overall employment does not increase but is still better paid. For high school dropouts, no persistent gains emerge. Moreover, the neighboring employment hub of Luxembourg induces a complete deadweight loss near the border.

Keywords: difference-in-differences; regression discontinuity design; low-educated; youth unemployment; hiring subsidies; spillover effects (search for similar items in EconPapers)
JEL-codes: C21 J08 J23 J24 J61 J64 J68 (search for similar items in EconPapers)
Pages: 113 pages
Date: 2023-05
New Economics Papers: this item is included in nep-eur, nep-lab, nep-mfd and nep-ure
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Published - revised version published in: Journal of Public Economics , 2024, 235, 105137

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Related works:
Journal Article: Long-term effects of hiring subsidies for low-educated unemployed youths (2024)
Working Paper: Long-Term Effects of Hiring Subsidies for Low-Educated Unemployed Youths (2024)
Working Paper: Long-Term Effects of Hiring Subsidies for Low-Educated Unemployed Youths (2023)
Working Paper: Long-term effects of hiring subsidies for low-educated unemployed youths (2023)
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