Gender differences in the effectiveness of hiring subsidies for young unemployed

This study empirically investigates gender differences in the effectiveness of a large-scale hiring subsidy programme for the young unemployed. The analysis employs administrative data for Poland and uses a difference-in-discontinuities strategy to identify the effect of eligibility for the new hiring subsidy programme on the likelihood of exiting unemployment. The main result is that there are gender differences in the effects, and in the medium term, the programme is effective for women but not for men. For young unemployed men, programme eligibility negatively affects exit rates from unemployment during the programme period (“lock-in effects”), but this negative effect disappears once the programme ends. In contrast, for young women, programme eligibility is not associated with negative “lock-in effects.” In the medium term, 30 to 36 months after entering unemployment, eligibility for the hiring subsidy increases the probability of women exiting unemployment by 2.8 to 4.6 percentage points compared to non-eligible women. This is mainly driven by women with preschool-age children. We discuss our results in light of channels and policy implications of hiring subsidies targeting the young unemployed.