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Hiring subsidies for people with a disability: Helping or hindering? - Evidence from a small scale social field experiment

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  • Deuchert, Eva
  • Kauer, Lukas

Abstract

Many countries provide hiring subsidies aimed at promoting the employment of people with disabilities. The effectiveness of these subsidy schemes remains unclear. The subsidy lowers wages and may thus increase employment, but may also signal lower quality of the applicant (who has to disclose a disability), which deter employers from hiring. This paper evaluates the effectiveness of employer incentives provided by the Swiss Disability Insurance using a small scale social field experiment. Participants write application letters, where it is randomly decided whether the application discloses the subsidy to the potential employer or not. The effectiveness of the hiring subsidy is measured by call-back rates for interviews. The study is conducted in two waves. The first wave focuses on graduates from sheltered Vocational Education & Training Programs. The second wave is implemented in a sample of clients from employment consulting services. Our results reveal that the subsidy is ineffective or even counterproductive in a group of adolescents who are at the end of their vocational training program, but may increase call-back rates in a group of clients of job coaching services.

Suggested Citation

  • 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.
    • Handle: RePEc:usg:econwp:2013:35
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    File URL: http://ux-tauri.unisg.ch/RePEc/usg/econwp/EWP-1335.pdf
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    References listed on IDEAS

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    Cited by:

    1. Sergi Jiménez-Martín & Arnau Juanmarti Mestres & Judit Vall Castello, 2017. "Hiring subsidies for people with disabilities: Do they work?," Policy Papers 2017-11, FEDEA.
    2. Boockmann Bernhard & Brändle Tobias, 2019. "Coaching, Counseling, Case-Working: Do They Help the Older Unemployed Out of Benefit Receipt and Back Into the Labor Market?," German Economic Review, De Gruyter, vol. 20(4), pages 436-468, December.
    3. 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.
    4. Stijn Baert, 2016. "Wage subsidies and hiring chances for the disabled: some causal evidence," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(1), pages 71-86, January.
    5. Bernhard Boockmann, 2015. "The effects of wage subsidies for older workers," IZA World of Labor, Institute of Labor Economics (IZA), pages 189-189, September.

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    More about this item

    Keywords

    Hiring subsidies; Effectiveness; Social field experiment;
    All these keywords.

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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