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Long-Term Unemployed hirings: Should targeted or untargeted policies be preferred?

Author

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  • Alessandra Pasquini

    (MEMOTEF Department Sapienza University of Rome, INAPP, Scienze Sociali ed Eonomiche Department Sapienza University of Rome)

  • Marco Centra

    (MEMOTEF Department Sapienza University of Rome, INAPP, Scienze Sociali ed Eonomiche Department Sapienza University of Rome)

  • Guido Pellegrini

    (MEMOTEF Department Sapienza University of Rome, INAPP, Scienze Sociali ed Eonomiche Department Sapienza University of Rome)

Abstract

To what extent, hiring incentives targeting a specific group of vulnerable unemployed (i.e. long term unemployed) are more effective, with respect to generalised incentives (without a definite target), to increase hirings of the targeted group? Are generalized incentives able to influence hirings of the vulnerable group? Do targeted policies have negative side effects too important to accept them? Even though there is a huge literature on hiring subsidies, these questions remained unresolved. We tried to answer them, comparing the impact of two similar hiring policies, one oriented towards a target group and one generalised, implemented on the italian labour market. We used administrative data on job contracts, and counterfactual analysis methods. The targeted policy had a positive and significant impact, while the generalized policy didn't have a significant impact on the vulnerable group. Moreover, we concluded the targeted policy didn't have any indirect negative side effect.

Suggested Citation

  • Alessandra Pasquini & Marco Centra & Guido Pellegrini, 2018. "Long-Term Unemployed hirings: Should targeted or untargeted policies be preferred?," Papers 1802.03343, arXiv.org, revised May 2018.
    • Handle: RePEc:arx:papers:1802.03343
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    References listed on IDEAS

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    Cited by:

    1. Emanuele Ciani & Adele Grompone & Elisabetta Olivieri, 2019. "Long-term unemployment and subsidies for permanent employment," Temi di discussione (Economic working papers) 1249, Bank of Italy, Economic Research and International Relations Area.
    2. 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.

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