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The effects of hiring credits on firm dynamics: a synthetic difference-in-differences evaluation

Author

Listed:
  • Santoni, Edoardo
  • Patriarca, Fabrizio
  • Scarlato, Margherita

Abstract

Despite hiring credits being a long-standing labor market policy, evidence of their impact at the firm level is limited. This paper contributes to the existing literature by providing an empirical analysis of an untargeted hiring credits policy introduced in Italy in 2015. We implement the Synthetic Control Difference in Differences method using administrative employer-employee data. The results show an increase in employment but at the same time a reduction in capital intensity, labor productivity and workforce quality. Furthermore, the reduction in labor costs for involved firms is not associated with an increase in their profitability.

Suggested Citation

  • Santoni, Edoardo & Patriarca, Fabrizio & Scarlato, Margherita, 2024. "The effects of hiring credits on firm dynamics: a synthetic difference-in-differences evaluation," GLO Discussion Paper Series 1546, Global Labor Organization (GLO).
    • Handle: RePEc:zbw:glodps:1546
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    More about this item

    Keywords

    hiring credits; synthetic difference-in-differences; firm performance;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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