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Can subsidized employment tackle long-term unemployment? Experimental evidence from North Macedonia

Author

Listed:
  • Alex Armand

    (Nova School of Business and Economics, NOVAFRICA, IFS)

  • Pedro Carneiro

    (University College London, IFS, CeMMAP, FAIR-NHH)

  • Federico Tagliati

    (Banco de España)

  • Yiming Xia

    (University College London)

Abstract

This paper examines the impact of an experiment in North Macedonia in which vulnerable unemployed individuals applying to a subsidized employment program were randomly selected to attend job interviews. Employers hiring a new employee from the target population receive a subsidy covering the wage cost of the worker for the first six months. Using administrative employment data, we find that attending the job interview led to an increase of 15 percentage points in the likelihood of being employed 3.5 years after the start of the intervention. We also find positive and statistically significant effects on individuals’ non-cognitive and work-related skills.

Suggested Citation

  • Alex Armand & Pedro Carneiro & Federico Tagliati & Yiming Xia, 2020. "Can subsidized employment tackle long-term unemployment? Experimental evidence from North Macedonia," Working Papers 2022, Banco de España.
    • Handle: RePEc:bde:wpaper:2022
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    More about this item

    Keywords

    active labor market policy; unemployment; wage subsidies; job search;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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