How Effective are Hiring Subsidies to Reduce Long-Term Unemployment Among Prime-Aged Jobseekers? Evidence from Belgium

38 Pages Posted: 4 Oct 2021

See all articles by Sam Desiere

Sam Desiere

KU Leuven - HIVA - Research Institute for Work and Society; Ghent University

Bart Cockx

Ghent University - Sherppa - Faculty of Economics and Business Administration; Institute for the Study of Labor (IZA); CESifo (Center for Economic Studies and Ifo Institute); IRES, Université Catholique de Louvain

Multiple version iconThere are 2 versions of this paper

Date Written: 2021

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.

Keywords: hiring subsidies, long-term unemployment, prime-aged jobseekers, triple difference, temporary help agencies

JEL Classification: H220, J080, J180, J230, J380, J640, J650, J680

Suggested Citation

Desiere, Sam and Desiere, Sam and Cockx, Bart L. W., How Effective are Hiring Subsidies to Reduce Long-Term Unemployment Among Prime-Aged Jobseekers? Evidence from Belgium (2021). CESifo Working Paper No. 9325, Available at SSRN: https://ssrn.com/abstract=3932034 or http://dx.doi.org/10.2139/ssrn.3932034

Sam Desiere (Contact Author)

KU Leuven - HIVA - Research Institute for Work and Society ( email )

Parkstraat 47
Leuven, BE3000
Belgium

Ghent University ( email )

Coupure Links 653
Gent, 9000
Belgium

Bart L. W. Cockx

Ghent University - Sherppa - Faculty of Economics and Business Administration ( email )

Ghent, B-9000
Belgium

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

IRES, Université Catholique de Louvain

Place Montesquieu, 3
Louvain-la-Neuve
Belgium

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