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How do COVID-19 re-hiring subsidies affect unemployment duration and incomes in Morocco? An instrumental variable approach

Author

Listed:
  • Chatri Abdellatif

    (Mohammed V University-Rabat)

  • Tahir Najia

    (Mohammed V University-Rabat)

Abstract

This paper attempts to estimate the impact of a rehiring subsidy implemented as part of the COVID-19 crisis impact response in Morocco. Using administrative data from the National Social Security Fund, it develops the instrumental variable method to estimate the causal effect of this scheme on unemployment duration and on beneficiaries’ wages. Intended for employees who have previously received unemployment benefits, this subsidy seems to have produced contrasting effects on the beneficiaries. On one hand, it had a “disincentive” effect on their job search efforts, increasing their unemployment duration, compared to non-beneficiaries. On the other hand, it strengthened their power of bargaining and selection, leading them to choose higher paying jobs, compared to those of non-beneficiaries.

Suggested Citation

  • Chatri Abdellatif & Tahir Najia, 2023. "How do COVID-19 re-hiring subsidies affect unemployment duration and incomes in Morocco? An instrumental variable approach," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 12(1), pages 1-19, December.
    • Handle: RePEc:spr:jecstr:v:12:y:2023:i:1:d:10.1186_s40008-023-00315-w
    DOI: 10.1186/s40008-023-00315-w
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    More about this item

    Keywords

    COVID-19; Impact evaluation; Instrumental variable; Morocco; Wage subsidies;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation

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