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Hiring subsidies for people with a disability: do they work?

Author

Listed:
  • Sergi Jiménez-Martín

    (Universitat Pompeu Fabra, Barcelona GSE and FEDEA)

  • Arnau Juanmartí Mestres

    (Universitat Pompeu Fabra (CRES-UPF))

  • Judit Vall Castelló

    (Universitat de Barcelona and CRES-UPF)

Abstract

This article evaluates the effectiveness of hiring subsidies targeted to people with disabilities. By exploiting the timing of implementation among different Spanish regions of a subsidy scheme implemented in Spain during the period 1990–2014, we employed a difference-in-differences approach to estimate the impact of the scheme on the probability of disability insurance (DI) beneficiaries of transiting to employment and on the propensity of individuals of entering the DI program. Our results show that the introduction of the subsidy scheme is in general ineffective at incentivizing transitions to employment, and in some cases it is associated with an increased propensity of transiting to DI. Furthermore, we show that an employment protection component incorporated into the subsidy scheme, consisting in the obligation for the employer to maintain the subsidized worker in employment, is associated with less transitions to permanent employment, more transitions to temporary employment and more transitions to DI, suggesting that these type of employment protection measures can have undesired effects for people with disabilities.

Suggested Citation

  • Sergi Jiménez-Martín & Arnau Juanmartí Mestres & Judit Vall Castelló, 2019. "Hiring subsidies for people with a disability: do they work?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(5), pages 669-689, July.
    • Handle: RePEc:spr:eujhec:v:20:y:2019:i:5:d:10.1007_s10198-019-01030-9
    DOI: 10.1007/s10198-019-01030-9
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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. Derbyshire, Daniel W. & Jeanes, Emma & Khedmati Morasae, Esmaeil & Reh, Susan & Rogers, Morwenna, 2024. "Employer-focused interventions targeting disability employment: A systematic review," Social Science & Medicine, Elsevier, vol. 347(C).

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    More about this item

    Keywords

    Disability; Employment subsidies; Labor market transitions; Disability insurance; Difference-in-differences;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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