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The Effects of Hiring Credits on Firms’ Dynamics: A Synthetic Difference-in-Differences Evaluation

Author

Listed:
  • Santoni Edoardo

    (University of Modena and Reggio Emilia and GLO, Modena, Italy)

  • Patriarca Fabrizio

    (University of Modena and Reggio Emilia and GLO, Modena, Italy)

  • Scarlato Margherita

    (University of Roma Tre, Rome, Italy)

Abstract

Hiring credits are a long-standing labor market policy, but 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, 2025. "The Effects of Hiring Credits on Firms’ Dynamics: A Synthetic Difference-in-Differences Evaluation," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 25(4), pages 1121-1181.
    • Handle: RePEc:bpj:bejeap:v:25:y:2025:i:4:p:1121-1181:n:1009
    DOI: 10.1515/bejeap-2024-0450
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    Keywords

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    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
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

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