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Hiring subsidies for low-educated unemployed youths are ineffective in a tight labor market

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  • Dejemeppe, Muriel
  • Delpierre, Matthieu
  • Pourtois, Mathilde

Abstract

We evaluate the impact of hiring subsidies for unemployed jobseekers in Wallonia, the Frenchspeaking region in the south of Belgium. The special feature of these subsidies is that they are more readily available for low-educated youths, who are eligible from registration as a jobseeker or a few months later. In contrast, others must wait 12 months to be eligible. We exploit this difference in a regression discontinuity design and show that earlier access to subsidies does not enhance the jobfinding rate of the target group. We attribute the lack of effect to the pre-pandemic tightening of the labor market.

Suggested Citation

  • Dejemeppe, Muriel & Delpierre, Matthieu & Pourtois, Mathilde, 2024. "Hiring subsidies for low-educated unemployed youths are ineffective in a tight labor market," GLO Discussion Paper Series 1451, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:1451
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    References listed on IDEAS

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    More about this item

    Keywords

    hiring subsidies; youth unemployment; low-educated; regression discontinuity design; labor market tightness;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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