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Do Hiring Credits Work in Recessions? Evidence from France

Author

Listed:
  • Cahuc, Pierre

    () (Sciences Po, Paris)

  • Carcillo, Stéphane

    () (OECD)

  • Le Barbanchon, Thomas

    () (Bocconi University)

Abstract

This paper evaluates the impact of an unexpected temporary hiring credit targeted at workers paid below 1.6 times the minimum wage in firms with less than 10 employees in France from December 2008 to December 2009. Using rich administrative data covering all French firms, we find that the program has had a strong and rapid impact on employment. The net cost per job created for the government was around zero. The employment effect was stronger in areas where recruitment was easier. Although the hiring credit was not conditional on net job creation, it did not increase churning of workers. Nevertheless, we estimate that a credit conditional on net job creation above the employment growth threshold of -1%, would have maximized job creation, and created about 4 times more jobs, at constant budget, provided that take-up had remained the same.

Suggested Citation

  • Cahuc, Pierre & Carcillo, Stéphane & Le Barbanchon, Thomas, 2014. "Do Hiring Credits Work in Recessions? Evidence from France," IZA Discussion Papers 8330, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp8330
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    Cited by:

    1. Aubert, Diane & Chiroleu-Assouline, Mireille, 2019. "Environmental tax reform and income distribution with imperfect heterogeneous labour markets," European Economic Review, Elsevier, vol. 116(C), pages 60-82.
    2. Matthew D. Webb & Arthur Sweetman & Casey Warman, 2016. "Targeting Tax Relief at Youth Employment," Canadian Public Policy, University of Toronto Press, vol. 42(4), pages 415-430, December.
    3. Paolo Sestito & Eliana Viviano, 2016. "Hiring incentives and/or firing cost reduction? Evaluating the impact of the 2015 policies on the Italian labour market," Questioni di Economia e Finanza (Occasional Papers) 325, Bank of Italy, Economic Research and International Relations Area.
    4. Eliason, Marcus & Hensvik, Lena & Kramarz, Francis & Nordström Skans, Oskar, 2017. "The causal impact of social Connections on firms' outcomes," Working Paper Series 2017:11, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    5. Alessio J. G. Brown, 2015. "Can hiring subsidies benefit the unemployed?," IZA World of Labor, Institute of Labor Economics (IZA), pages 163-163, June.
    6. David Neumark, 2016. "Policy levers to increase jobs and increase income from work after the Great Recession," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-38, December.
    7. Olivier Baguelin, 2015. "Commentaire. Contrats aidés des secteurs marchand et non marchand : deux logiques appelant des modalités distinctes d'évaluation ?," Économie et Statistique, Programme National Persée, vol. 477(1), pages 131-140.
    8. Bernhard Boockmann, 2015. "The effects of wage subsidies for older workers," IZA World of Labor, Institute of Labor Economics (IZA), pages 189-189, September.
    9. Sjögren, Anna & Vikström, Johan, 2015. "How long and how much? Learning about the design of wage subsidies from policy changes and discontinuities," Labour Economics, Elsevier, vol. 34(C), pages 127-137.

    More about this item

    Keywords

    labor demand; hiring credit;

    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
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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