The employment effects of low-wage subsidies

Kristiina Huttunen, Jukka Pirttilä and Roope Uusitalo

No 254, Working Papers from Työn ja talouden tutkimus LABORE, The Labour Institute for Economic Research LABORE

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 the 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)
Pages: 36 pages
Date: 2009-10-01
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https://labore.fi/wp-content/uploads/2009/10/Tyopapereita-254.pdf First version, 2009 (application/pdf)

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 (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:pst:wpaper:254

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