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

  • M. Deidda

    ()

  • A. Di Liberto

    ()

  • M. Foddi

    ()

  • G. Sulis

    ()

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.

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Paper provided by Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia in its series Working Paper CRENoS with number 201216.

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Date of creation: 2012
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Handle: RePEc:cns:cnscwp:201216
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  1. Caliendo, Marco & Künn, Steffen, 2011. "Start-up subsidies for the unemployed: Long-term evidence and effect heterogeneity," Journal of Public Economics, Elsevier, vol. 95(3), pages 311-331.
  2. G. Sulis, 2007. "Gender Wage Differentials in Italy: a Structural Estimation Approach," Working Paper CRENoS 200715, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  3. Lechner, Michael & Melly, Blaise, 2007. "Earnings Effects of Training Programs," CEPR Discussion Papers 6400, C.E.P.R. Discussion Papers.
  4. Card, David Edward & Kluve, Jochen & Weber, Andrea Maria, 2009. "Active Labor Market Policy Evaluations – A Meta-analysis," Ruhr Economic Papers 86, Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI), Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
  5. Adriana Di Liberto & James Symons, 2001. "Education and Italian regional development," LSE Research Online Documents on Economics 20121, London School of Economics and Political Science, LSE Library.
  6. Bergemann, Annette & van den Berg, Gerard, 2007. "Active labor market policy effects for women in Europe - a survey," Working Paper Series 2007:3, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  7. Paolo Naticchioni & Silvia Loriga, 2010. "Short and long term evaluations of Public Employment Services in Italy," Working Papers 2010-03, Universita' di Cassino, Dipartimento di Scienze Economiche.
  8. Kluve, Jochen & Lehmann, Hartmut & Schmidt, Christoph M, 1999. "Active Labour Market Policies in Poland: Human Capital Enhancement, Stigmatization or Benefit Churning?," CEPR Discussion Papers 2059, C.E.P.R. Discussion Papers.
  9. Bratti, Massimiliano & Del Bono, Emilia & Vuri, Daniela, 2004. "New Mothers' Labour Force Participation in Italy: The Role of Job Characteristics," IZA Discussion Papers 1111, Institute for the Study of Labor (IZA).
  10. Gerfin, Michael & Lechner, Michael & Steiger, Heidi, 2005. "Does subsidised temporary employment get the unemployed back to work? Aneconometric analysis of two different schemes," Labour Economics, Elsevier, vol. 12(6), pages 807-835, December.
  11. Schneider, Friedrich, 2012. "The Shadow Economy and Work in the Shadow: What Do We (Not) Know?," IZA Discussion Papers 6423, Institute for the Study of Labor (IZA).
  12. van den Berg, Gerard J & van der Klaauw, Bas, 2001. "Counselling and Monitoring of Unemployed Workers: Theory and Evidence from a Controlled Social Experiment," CEPR Discussion Papers 2986, C.E.P.R. Discussion Papers.
  13. Leigh, Andrew, 2010. "Informal care and labor market participation," Labour Economics, Elsevier, vol. 17(1), pages 140-149, January.
  14. Rafael Lalive & JanC. vanOurs & Josef Zweimüller, 2008. "The Impact of Active Labour Market Programmes on The Duration of Unemployment in Switzerland," Economic Journal, Royal Economic Society, vol. 118(525), pages 235-257, 01.
  15. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2000. "The Role of Social Capital in Financial Development," NBER Working Papers 7563, National Bureau of Economic Research, Inc.
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  17. Killingsworth, Mark R. & Heckman, James J., 1987. "Female labor supply: A survey," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 2, pages 103-204 Elsevier.
  18. Ponzo, Michela & Scoppa, Vincenzo, 2010. "The use of informal networks in Italy: Efficiency or favoritism?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 39(1), pages 89-99, January.
  19. N�ria Rodríguez-Planas, 2010. "Channels through which Public Employment Services and Small Business Assistance Programmes Work," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(4), pages 458-485, 08.
  20. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Wiley Blackwell, vol. 65(2), pages 261-94, April.
  21. Jeffrey Smith & Petra Todd, 2003. "Does Matching Overcome Lalonde's Critique of Nonexperimental Estimators?," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20035, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
  22. Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity Score-Matching Methods For Nonexperimental Causal Studies," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 151-161, February.
  23. Barbara Sianesi, 2004. "An Evaluation of the Swedish System of Active Labor Market Programs in the 1990s," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 133-155, February.
  24. Schneider, Friedrich, 2011. "The Shadow Economy and Shadow Economy Labor Force: What Do We (Not) Know?," IZA Discussion Papers 5769, Institute for the Study of Labor (IZA).
  25. Michael Gerfin & Michael Lechner, 2002. "A Microeconometric Evaluation of the Active Labour Market Policy in Switzerland," Economic Journal, Royal Economic Society, vol. 112(482), pages 854-893, October.
  26. Adriano Paggiaro & Enrico Rettore & Ugo Trivellato, 2009. "The Effect of a Longer Eligibility to a Labour Market Programme for Dismissed Workers," LABOUR, CEIS, vol. 23(1), pages 37-66, 03.
  27. Austin Nichols, 2007. "Causal inference with observational data," Stata Journal, StataCorp LP, vol. 7(4), pages 507-541, December.
  28. Fougère, Denis & Pradel, Jacqueline & Roger, Muriel, 2009. "Does the public employment service affect search effort and outcomes?," European Economic Review, Elsevier, vol. 53(7), pages 846-869, October.
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  30. repec:ese:iserwp:2011-21 is not listed on IDEAS
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