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Female-Targeted Hiring Subsidies, Firm Learning, and Women’s Employment

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  • Mimosa Distefano
  • Lorenzo Incoronato
  • Anna Raute

Abstract

Women often struggle to re-enter employment after career breaks, possibly because employers are uncertain about their productivity. We study whether hiring subsidies help firms overcome this uncertainty and hire from this group. Exploiting an Italian policy that temporarily cut payroll taxes for women hired from non-employment, we find that firms persistently hire more women with career breaks, including mothers, following subsidy adoption. Consistent with employer learning about target-group productivity, firms with better initial matches later hire more from this group. Subsidized workers also show stronger labor-market attachment. These findings suggest demand-side interventions can complement supply-side policies in addressing gender gaps.

Suggested Citation

  • Mimosa Distefano & Lorenzo Incoronato & Anna Raute, 2026. "Female-Targeted Hiring Subsidies, Firm Learning, and Women’s Employment," RFBerlin Discussion Paper Series 26211, ROCKWOOL Foundation Berlin (RFBerlin).
    • Handle: RePEc:crm:wpaper:26211
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    Keywords

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    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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