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The effects of wage subsidies for older workers

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  • Bernhard Boockmann

    (Institute for Applied Economic Research at the University of Tübingen, and IZA, Germany)

Abstract

Population aging in many developed countries has motivated some governments to provide wage subsidies to employers for hiring or retaining older workers. The subsidies are intended to compensate for the gap between the pay and productivity of older workers, which may discourage their hiring. A number of empirical studies have investigated how wage subsidies influence employers’ hiring and employment decisions and whether the subsidies are likely to be efficient. To which groups subsidies should be targeted and how the wage subsidy programs interact with incentives for early retirement are open questions.

Suggested Citation

  • Bernhard Boockmann, 2015. "The effects of wage subsidies for older workers," IZA World of Labor, Institute of Labor Economics (IZA), pages 189-189, September.
    • Handle: RePEc:iza:izawol:journl:y:2015:n:189
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    References listed on IDEAS

    as
    1. Brown, Alessio J.G. & Merkl, Christian & Snower, Dennis J., 2011. "Comparing the effectiveness of employment subsidies," Labour Economics, Elsevier, vol. 18(2), pages 168-179, April.
    2. Blundell, Richard, 2006. "Earned income tax credit policies: Impact and optimality: The Adam Smith Lecture, 2005," Labour Economics, Elsevier, vol. 13(4), pages 423-443, August.
    3. Kluve, Jochen, 2010. "The effectiveness of European active labor market programs," Labour Economics, Elsevier, vol. 17(6), pages 904-918, December.
    4. repec:hal:spmain:info:hdl:2441/4bckbd1dtk8jdp1dnjedlgofe2 is not listed on IDEAS
    5. Andrea ALBANESE & Bart COCKX, 2015. "Permanent Wage Cost Subsidies for Older Workers. An Effective Tool for Increasing Working Time and Postponing Early Retirement?," LIDAM Discussion Papers IRES 2015006, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    6. Huttunen, Kristiina & Pirttilä, Jukka & Uusitalo, Roope, 2013. "The employment effects of low-wage subsidies," Journal of Public Economics, Elsevier, vol. 97(C), pages 49-60.
    7. Cahuc, Pierre & Carcillo, Stéphane & Le Barbanchon, Thomas, 2014. "Do Hiring Credits Work in Recessions? Evidence from France," IZA Discussion Papers 8330, Institute of Labor Economics (IZA).
    8. Pierre Cahuc & Stéphane Carcillo & Thomas Le Barbanchon, 2014. "Do Hiring Credits Work in Recessions?," Working Papers hal-03602366, HAL.
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    10. Brian Bell & Richard Blundell & John Reenen, 1999. "Getting the Unemployed Back to Work: The Role of Targeted Wage Subsidies," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 6(3), pages 339-360, August.
    11. Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1261-1284, December.
    12. Bernhard Boockmann & Thomas Zwick & Andreas Ammermüller & Michael Maier, 2012. "Do Hiring Subsidies Reduce Unemployment Among Older Workers? Evidence From Natural Experiments," Journal of the European Economic Association, European Economic Association, vol. 10(4), pages 735-764, August.
    13. Pierre Cahuc & Stéphane Carcillo & Thomas Le Barbanchon, 2014. "Do Hiring Credits Work in Recessions?," SciencePo Working papers Main hal-03602366, HAL.
    14. Deuchert, Eva & Kauer, Lukas, 2013. "Hiring subsidies for people with a disability: Helping or hindering? - Evidence from a small scale social field experiment," Economics Working Paper Series 1335, University of St. Gallen, School of Economics and Political Science.
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    Cited by:

    1. Ernst, Ekkehard & Merola, Rossana & Reljic, Jelena, 2024. "Fiscal policy instruments for inclusive labour markets: A review," GLO Discussion Paper Series 1406, Global Labor Organization (GLO).
    2. Cörvers, Frank & Reinold, Julia & Chakkar, Saena & Bolzonella, Francesco & Ronda, Vera, 2021. "Literature review labour migration," ROA Technical Report 005, Maastricht University, Research Centre for Education and the Labour Market (ROA).

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    More about this item

    Keywords

    long-term unemployment; active labor market programs; older workers; early retirement; labor demand; wage subsidies;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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