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The perverse effects of hiring credits as a place-based policy: Evidence from Southern Italy

Author

Listed:
  • d'Agostino, Giorgio
  • Patriarca, Fabrizio
  • Pieroni, Luca
  • Scarlato, Margherita

Abstract

This paper evaluates the wage effects of a tax credit policy on new hirings in Southern Italy. We use high-quality administrative data and propose a latent class inverse probability weighting method as a strategy to account for workers' unobserved heterogeneity. We find an unexpected negative effect of the tax cut on the wages of treated workers, which is more marked for women. Our results also provide new insights on the job-segregation dimension of the gender gap. We provide a theoretical model with worker and firm fixed effects to analyse the impact of employer tax cuts as a place-based policy in lagging regions.

Suggested Citation

  • d'Agostino, Giorgio & Patriarca, Fabrizio & Pieroni, Luca & Scarlato, Margherita, 2020. "The perverse effects of hiring credits as a place-based policy: Evidence from Southern Italy," MPRA Paper 102240, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:102240
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    References listed on IDEAS

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    More about this item

    Keywords

    Regional disparities; place-based policies; hiring credits; wage differentials; gender segregation.;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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