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Employment Subsidies, Informal Economy and Women’s Transition into Work in a Depressed Area: Evidence from a Matching Approach

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  • M. Deidda

    ()

  • A. Di Liberto

    ()

  • M. Foddi

    ()

  • G. Sulis

    ()

Abstract

We analyse the effects of an active labour market program for disadvantaged workers recently implemented in an Italian depressed area. Our sample includes 859 workers, mostly women, who entered the program before April 2008 and were subsequently interviewed in 2009-10. We complement the existing administrative data with survey data that enables us to control for numerous individual and labour market characteristics for both treated and non-treated individuals. Using propensity-score matching methods, we do find that the employment subsidy had a positive and significant effect (ATT) on both the probability of finding a job for participants and on their level of income. We also control for effect heterogeneity and find that the outcome of the policy was higher for women and, among them, we also find that the program was more effective on less educated and older female workers. Finally, we exploit unique information on previous contacts between workers and firms and on the use of informal channels for job search activity to explore the role of underground employment relations for the effectiveness of the policy.

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Bibliographic Info

Paper provided by Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia in its series Working Paper CRENoS with number 201216.

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Date of creation: 2012
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Handle: RePEc:cns:cnscwp:201216

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Related research

Keywords: active labour market programs; female labour-force participation; employment subsidies; propensity score matching; informal networks;

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References

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  1. Paolo Naticchioni & Silvia Loriga, 2010. "Short and long term evaluations of Public Employment Services in Italy," Working Papers 2010-03, Universita' di Cassino, Dipartimento di Scienze Economiche.
  2. Bergemann, Annette & van den Berg, Gerard J., 2006. "Active Labor Market Policy Effects for Women in Europe: A Survey," IZA Discussion Papers 2365, Institute for the Study of Labor (IZA).
  3. David Card & Jochen Kluve & Andrea Weber, 2009. "Active Labor Market Policy Evaluations – A Meta-analysis," Ruhr Economic Papers 0086, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  4. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November.
  5. Caliendo, Marco & Künn, Steffen, 2011. "Start-up subsidies for the unemployed: Long-term evidence and effect heterogeneity," Journal of Public Economics, Elsevier, vol. 95(3), pages 311-331.
  6. Adriana Di Liberto & James Symons, 2001. "Education and Italian regional development," LSE Research Online Documents on Economics 20121, London School of Economics and Political Science, LSE Library.
  7. Jochen Kluve & Hartmut Lehmann & Christopher Schmidt, 1998. "Active Labor Market Policies in Poland: Human Capital Enhancement, Stigmatization or Benefit Churning?," William Davidson Institute Working Papers Series 215, William Davidson Institute at the University of Michigan.
  8. G. Sulis, 2007. "Gender Wage Differentials in Italy: a Structural Estimation Approach," Working Paper CRENoS 200715, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  9. Ponzo, Michela & Scoppa, Vincenzo, 2009. "The Use of Informal Networks in Italy: Efficiency or Favoritism?," MPRA Paper 17281, University Library of Munich, Germany.
  10. Barbara Sianesi, 2004. "An Evaluation of the Swedish System of Active Labor Market Programs in the 1990s," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 133-155, February.
  11. Gerfin, Michael & Lechner, Michael, 2000. "Microeconometric Evaluation of the Active Labour Market Policy in Switzerland," IZA Discussion Papers 154, Institute for the Study of Labor (IZA).
  12. Killingsworth, Mark R. & Heckman, James J., 1987. "Female labor supply: A survey," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 2, pages 103-204 Elsevier.
  13. Austin Nichols, 2007. "Causal inference with observational data," Stata Journal, StataCorp LP, vol. 7(4), pages 507-541, December.
  14. Dehejia, R.H. & Wahba, S., 1998. "Propensity Score Matching Methods for Non-Experimental Causal Studies," Discussion Papers 1998_02, Columbia University, Department of Economics.
  15. Gerfin, Michael & Lechner, Michael & Steiger, Heidi, 2002. "Does subsidised temporary employment get the unemployed back to work? An econometric analysis of two different schemes," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 A2-2, International Conferences on Panel Data.
  16. Bratti, Massimiliano & Del Bono, Emilia & Vuri, Daniela, 2004. "New Mothers' Labour Force Participation in Italy: The Role of Job Characteristics," IZA Discussion Papers 1111, Institute for the Study of Labor (IZA).
  17. Jeffrey Smith & Petra Todd, 2003. "Does Matching Overcome Lalonde's Critique of Nonexperimental Estimators?," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20035, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
  18. Fougère, Denis & Pradel, Jacqueline & Roger, Muriel, 2008. "Does the Public Employment Service Affect Search Effort and Outcomes?," CEPR Discussion Papers 7095, C.E.P.R. Discussion Papers.
  19. Schneider, Friedrich, 2011. "The Shadow Economy and Shadow Economy Labor Force: What Do We (Not) Know?," IZA Discussion Papers 5769, Institute for the Study of Labor (IZA).
  20. Rafael Lalive & JanC. vanOurs & Josef Zweimüller, 2008. "The Impact of Active Labour Market Programmes on The Duration of Unemployment in Switzerland," Economic Journal, Royal Economic Society, vol. 118(525), pages 235-257, 01.
  21. Adriano Paggiaro & Enrico Rettore & Ugo Trivellato, 2009. "The Effect of a Longer Eligibility to a Labour Market Programme for Dismissed Workers," LABOUR, CEIS, vol. 23(1), pages 37-66, 03.
  22. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Wiley Blackwell, vol. 65(2), pages 261-94, April.
  23. Núria Rodríguez-Planas & Benus Jacob, 2010. "Evaluating active labor market programs in Romania," Empirical Economics, Springer, vol. 38(1), pages 65-84, February.
  24. repec:ese:iserwp:2011-21 is not listed on IDEAS
  25. Leigh, Andrew, 2010. "Informal care and labor market participation," Labour Economics, Elsevier, vol. 17(1), pages 140-149, January.
  26. N�ria Rodríguez-Planas, 2010. "Channels through which Public Employment Services and Small Business Assistance Programmes Work," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(4), pages 458-485, 08.
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