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A poisoned gift? The hireability signals of an income-support program for the senior unemployed

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  • Axana DALLE

    (Ghent University)

  • Philippe STERKENS

    (Ghent University)

  • Stijn BAERT

    (Ghent University)

Abstract

Many Organization for Economic Co-operation and Development countries invest heavily in labor-market programs to prolong careers. Although active labor-market programs have frequently been evaluated, less is known about passive programs supporting unemployed seniors financially. We focus on the latter by investigating the hiring opportunities of candidates who partake in a regime that ensures dismissed seniors a company supplement alongside regular unemployment benefits. Therefore, we conduct a scenario experiment in which genuine recruiters evaluate fictitious candidates who have spent varying durations unemployed in regimes with and without the company supplement. Because recruiters evaluate candidates' hireability and productivity perceptions, we can identify underlying mechanisms. Overall, we find no evidence of employer-side stigma hindering the re-employment of seniors unemployed in the program. Conversely, longer-term unemployed even benefit from this regime because it mitigates regular stigmatization of long-term unemployment, especially for men. Specifically, recruiters judge them more mildly – particularly regarding flexibility – when they receive the supplement and still apply.

Suggested Citation

  • Axana DALLE & Philippe STERKENS & Stijn BAERT, 2024. "A poisoned gift? The hireability signals of an income-support program for the senior unemployed," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 90(4), pages 553-588, December.
  • Handle: RePEc:ctl:louvde:v:90:y:2024:i:4:p:553-588
    DOI: 10.1017/dem.2024.11
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    References listed on IDEAS

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    1. Stijn Baert, 2016. "Wage subsidies and hiring chances for the disabled: some causal evidence," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(1), pages 71-86, January.
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    Cited by:

    1. Dalle, Axana & Verhofstadt, Elsy & Baert, Stijn, 2024. "The subsidy trap: Explaining the unsatisfactory effectiveness of hiring subsidies for the senior unemployed," Journal of Economic Behavior & Organization, Elsevier, vol. 227(C).

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    More about this item

    Keywords

    Hiring discrimination; Signalling effect; Income support; Labor-market program; Scenario experiment;
    All these keywords.

    JEL classification:

    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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