How effective are hiring subsidies in reducing long-term unemployment among prime-aged jobseekers? Evidence from Belgium

Sam Desiere, Bart Cockx
2022 IZA Journal of Labor Policy  
Hiring subsidies are widely used to create (stable) employment for the long-term unemployed. This paper exploits the abolition of a hiring subsidy targeted at long-term unemployed jobseekers older than 45 years of age in Belgium to evaluate its effectiveness in the short and medium run. Based on a triple-difference methodology, the hiring subsidy is shown to increase the job-finding rate by 13% without any evidence of spillover effects. This effect is driven by a positive effect on individuals
more » ... ith at least a bachelor's degree. However, the hiring subsidy mainly creates temporary short-lived employment: eligible jobseekers are not more likely to find employment that lasts at least 12 consecutive months compared with ineligible jobseekers.
doi:10.2478/izajolp-2022-0003 fatcat:p7pacttr3nektouykmdbqgce24