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Employment Subsidies, Informal Economy and Women's Transition into Work in a Depressed Area: Evidence from a Matching Approach

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  • M. Deidda
  • A. Di Liberto
  • M. Foddi
  • G. Sulis

Abstract

We analyse the effects of an active labour market program for disadvantaged workers recently implemented in an Italian depressed area. Our sample includes 859 workers, mostly women, who entered the program before April 2008 and were subsequently interviewed in 2009-10. We complement the existing administrative data with survey data that enables us to control for numerous individual and labour market characteristics for both treated and non-treated individuals. Using propensity-score matching methods, we do find that the employment subsidy had a positive and significant effect (ATT) on both the probability of finding a job for participants and on their level of income. We also control for effect heterogeneity and find that the outcome of the policy was higher for women and, among them, we also find that the program was more effective on less educated and older female workers. Finally, we exploit unique information on previous contacts between workers and firms and on the use of informal channels for job search activity to explore the role of underground employment relations for the effectiveness of the policy.

Suggested Citation

  • M. Deidda & A. Di Liberto & M. Foddi & G. Sulis, 2012. "Employment Subsidies, Informal Economy and Women's Transition into Work in a Depressed Area: Evidence from a Matching Approach," Working Paper CRENoS 201216, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  • Handle: RePEc:cns:cnscwp:201216
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    Cited by:

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    3. Binnur Balkan & Yusuf Soner Baskaya & Semih Tumen, 2014. "Evaluating the Impact of the Post-2008 Employment Subsidy Program in Turkey," Working Papers 1414, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    4. Yasemin Dildar, 2020. "Targeting Women’s Employment: Do Employment Subsidies Work? Evidence from Turkey," Review of Radical Political Economics, Union for Radical Political Economics, vol. 52(1), pages 5-25, March.
    5. Halit Basbuga & Hatip Kitapci, 2020. "The Effects of the Incentive for Young and Female Employment Regulated By Law No. 6111 and Macroeconomic Variables on Employment, Informal Employment, and," International Journal of Economics and Financial Issues, Econjournals, vol. 10(5), pages 178-186.
    6. Halit Basbuga & Hakan Kitapci & Enes Cengiz Oguz & Yusuf Elkoca, 2022. "Active Labour Market Policies and Macroeconomic Variables on Employment, Informal Employment and Income Effects: The case of Turkey," International Journal of Economics and Financial Issues, Econjournals, vol. 12(2), pages 72-83, March.

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    More about this item

    Keywords

    active labour market programs; female labour-force participation; employment subsidies; propensity score matching; informal networks;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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