How effective are hiring subsidies to reduce long-term unemployment among prime-aged jobseekers? Evidence from Belgium

Sam Desiere, Bart Cockx

Research output: Working paper / PreprintWorking paper

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Abstract

Hiring subsidies are widely used to create (stable) employment for the long-term unemployed. This paper exploits the abolition of a hiring subsidy targeted at long-term unemployed jobseekers over 45 years of age in Belgium to evaluate its effectiveness in the short and medium run. Based on a triple difference methodology the hiring subsidy
is shown to increase the job finding rate by 13% without any evidence of spill-over effects. This effect is driven by a positive effect on individuals with at least a bachelor’s
degree. However, the hiring subsidy mainly created temporary short-lived employment: eligible jobseekers were not more likely to find employment that lasted at least twelve
consecutive months than ineligible jobseekers.
Original languageEnglish
Place of PublicationMaastricht
PublisherROA
Number of pages38
DOIs
Publication statusPublished - 4 Oct 2021

Publication series

SeriesROA Research Memoranda
Number005

JEL classifications

  • h22 - Taxation and Subsidies: Incidence
  • j08 - Labor Economics Policies
  • j18 - Demographic Economics: Public Policy
  • j23 - Labor Demand
  • j38 - Wages, Compensation, and Labor Costs: Public Policy
  • j64 - Unemployment: Models, Duration, Incidence, and Job Search
  • j65 - "Unemployment Insurance; Severance Pay; Plant Closings"
  • j68 - Mobility, Unemployment, and Vacancies: Public Policy

Keywords

  • hiring subsidies
  • long-term unemployment
  • prime-aged jobseekers
  • triple difference
  • temporary help agencies

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