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Effects of Hiring Credits on the Argentine Labor Market

Author

Listed:
  • Octavio Bertín

    (CEDLAS-IIE-FCE-UNLP)

  • Guillermo Cruces

    (CEDLAS-IIE-FCE-UNLP & University of Nottingham)

  • Fabian Enrique Gonzalez

    (CEDLAS-IIE-FCE-UNLP)

  • Ignacio Lunghi

    (CEDLAS-IIE-FCE-UNLP)

  • Azul Menduiña

    (CEDLAS-IIE-FCE-UNLP)

Abstract

This study assesses the impact of a hiring credit policy introduced in Argentina in 2014 on various labor outcomes of firms. The reform established differentiated labor cost reductions in the employers contributions to be paid for their new employees, according to the size that firms had at a date prior to the announcement of the policy. Using a differences-in-differences approach and employer-employee administrative data, we analyze the intervention’s effects. Our results show a significant 4.1 percentage point increase in employment growth rates for small firms compared to medium-sized ones, persisting for several years post-reform. This paper also explores the relationship between the intervention’s effects and sector labor informality; we find a significant 6.2 percentage point increase in employment growth rates for firms in high-informality sector, whereas no significant effect is found for firms in low-informality sectors.

Suggested Citation

  • Octavio Bertín & Guillermo Cruces & Fabian Enrique Gonzalez & Ignacio Lunghi & Azul Menduiña, 2024. "Effects of Hiring Credits on the Argentine Labor Market," CEDLAS, Working Papers 0342, CEDLAS, Universidad Nacional de La Plata.
    • Handle: RePEc:dls:wpaper:0342
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    References listed on IDEAS

    as
    1. Adriana Camacho & Emily Conover & Alejandro Hoyos, 2014. "Effects of Colombia's Social Protection System on Workers' Choice between Formal and Informal Employment," The World Bank Economic Review, World Bank, vol. 28(3), pages 446-466.
    2. Gerard, François & Gonzaga, Gustavo, 2016. "Informal Labor and the Efficiency Cost of Social Programs: Evidence from the Brazilian Unemployment Insurance Program," CEPR Discussion Papers 11485, C.E.P.R. Discussion Papers.
    3. Cruces, Guillermo & Galiani, Sebastian & Kidyba, Susana, 2010. "Payroll taxes, wages and employment: Identification through policy changes," Labour Economics, Elsevier, vol. 17(4), pages 743-749, August.
    4. Egebark, Johan & Kaunitz, Niklas, 2013. "Do payroll tax cuts raise youth employment?," Working Paper Series 2013:27, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    5. Batut, Cyprien, 2021. "The longer term impact of hiring credits. Evidence from France," Labour Economics, Elsevier, vol. 72(C).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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