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Hiring subsidies for low-educated unemployed youths are ineffective in a tight labor market

Author

Listed:
  • Muriel DEJEMEPPE

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

  • Matthieu DELPIERRE

    (IWEPS)

  • Mathilde POURTOIS

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

Abstract

We evaluate the impact of hiring subsidies for unemployed jobseekers in Wallonia, the French-speaking region in the south of Belgium. The special feature of these subsidies is that they are more readily available for low-educated youths, who are eligible from registration as a jobseeker or a few months later. In contrast, others must wait 12 months to be eligible. We exploit this difference in a regression discontinuity design and show that earlier access to subsidies does not enhance the job finding rate of the target group. We attribute the lack of effect to the pre-pandemic tightening of the labor market.

Suggested Citation

  • Muriel DEJEMEPPE & Matthieu DELPIERRE & Mathilde POURTOIS, 2024. "Hiring subsidies for low-educated unemployed youths are ineffective in a tight labor market," LIDAM Discussion Papers IRES 2024009, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:2024009
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    More about this item

    Keywords

    Hiring subsidies; Youth unemployment; Low-educated; Regression discontinuity design; Labor market tightness;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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