Wage Subsidies

This paper studies how targeted wage subsidies aect the performance of the recruiting rms. Using Swedish administrative data from the period 1998-2006, we show that treated rms substantially outperforms other recruiting rms after hiring through subsidies, despite identical pre-treatment performance trends in wide set of key dimensions. These positive eects completely disappear after 2007. We attribute this change to a policy reform that removed the involvement of caseworkers from the subsidy approval process. Overall, our results suggest that targeted employment subsidies can have large positive eects on post-match outcomes of the hiring rms, but only if the policy environment allows for prescreening by caseworkers.

The longstanding aim of social security reforms in economically advanced countries has been to ensure that work is financially beneficial. In-work benefits (IWB) have emerged as pivotal tools in achieving this objective. Earnings disregards, which exempt a portion of earned income from benefit calculations, represent one form of IWBs. This study focuses on Finland's general housing allowance, examining its use following the 2015 reform that introduced the earnings disregard. Using the total population registry of all single-adult households from 2011 to 2018, we observed a significant rise in housing allowance recipients with earned income, underscoring the growing role of the allowance as an IWB. There was a notable increase in housing allowance recipients, particularly in low-wage service sectors and industries marked by atypical employment patterns. Although IWBs contribute to low-paid workers' earnings, the empirical findings raise the critical question of whether these benefits form wage subsidies that incentivise employers to further increase the use of low-paid, non-standard jobs.

The primary goal of the ILO is to work with member States towards achieving full and productive employment and decent work for all. This goal is elaborated in the ILO Declaration 2008 on Social Justice for a Fair Globalization, 1 which has been widely adopted by the international community. Comprehensive and integrated perspectives on measures aimed at achieving this goal are embedded in the Employment Policy Convention of 1964 (No. 122), the Global Employment Agenda (2003) andin response to the 2008 global economic crisisthe Global Jobs Pact (2009) and the conclusions of the Recurrent Discussion Reports on Employment (2010 and 2014). The Employment Policy Department (EMPLOYMENT) is engaged in global advocacy and supporting member States in their efforts to place more and better jobs at the centre of economic and social policies and growth and development strategies. Policy research and knowledge generation and dissemination are essential components of the '. The resulting publications include books, country policy reviews, policy and research briefs and working papers. 2 The Employment Policy Working Paper series is designed to disseminate the main findings of research on a broad range of topics undertaken by the branches of the Department. The working papers are intended to encourage the exchange of ideas and to stimulate debate. The views expressed within them are the responsibility of the authors and do not necessarily represent those of the ILO.

The primary goal of the ILO is to work with member States towards achieving full and productive employment and decent work for all. This goal is elaborated in the ILO Declaration 2008 on Social Justice for a Fair Globalization, 1 which has been widely adopted by the international community. Comprehensive and integrated perspectives on measures aimed at achieving this goal are embedded in the Employment Policy Convention of 1964 (No. 122), the Global Employment Agenda (2003) andin response to the 2008 global economic crisisthe Global Jobs Pact (2009) and the conclusions of the Recurrent Discussion Reports on Employment (2010 and 2014). The Employment Policy Department (EMPLOYMENT) is engaged in global advocacy and supporting member States in their efforts to place more and better jobs at the centre of economic and social policies and growth and development strategies. Policy research and knowledge generation and dissemination are essential components of the '. The resulting publications include books, country policy reviews, policy and research briefs and working papers. 2 The Employment Policy Working Paper series is designed to disseminate the main findings of research on a broad range of topics undertaken by the branches of the Department. The working papers are intended to encourage the exchange of ideas and to stimulate debate. The views expressed within them are the responsibility of the authors and do not necessarily represent those of the ILO.

The governments of most advanced countries offer some type of financial subsidy to encourage firm innovation and productivity. This paper analyzes the effects of innovation subsidies using a unique Swedish database that contains firm level data for the period 1997-2011, specifically informa tion on firm subsidies over a broad range of programs. Applying causal treatment effect analysis based on matching and a diff-in-diff approach combined with a qualitative case study of Swedish innovation subsidy programs, we test whether such subsidies have positive effects on firm performance. Our results indicate a lack of positive performance effects in the long run for the majority of firms, albeit there are positive short-run effects on human capital investments and also positive short-term productivity effects for the smallest firms. These findings are interpreted from a robust political economy perspective that reveals that the problems of acquiring correct information and designing appropriate incentives are so complex that the absence of significant positive long-run effects on firm performance for the majority of firms is not surprising. Keywords Innovation subsidies Á Market failures Á Causal treatment effect evaluation Á Firm performance Á CEM Á Robust political economy JEL Classification H25 Á O38 Á P16 Electronic supplementary material The online version of this article (

Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence.

Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but IZA takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The IZA Institute of Labor Economics is an independent economic research institute that conducts research in labor economics and offers evidence-based policy advice on labor market issues. Supported by the Deutsche Post Foundation, IZA runs the world's largest network of economists, whose research aims to provide answers to the global labor market challenges of our time. Our key objective is to build bridges between academic research, policymakers and society. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.

This paper uses a large-scale two-level randomized experiment to study direct and displacement effects of job search assistance. Our findings show that the assistance reduces unemployment among the treated, but also creates substantial displacement leading to higher unemployment for the non-treated. By using detailed information on caseworker and job seeker behavior we show that vacancy referrals passed on from caseworkers to job seekers is the driving mechanism behind the positive direct effect. We also examine explanations for the displacement effect and show that displacement is not due to constrained resources, but arises in the labor market. A comparison between different meeting formats suggests that face-to-face meetings and distance meetings are more effective than group meetings. Despite the existence of displacement effects, when we incorporate our results into an equilibrium search model we find that a complete roll-out of the program would lead to lower unemployment and reduced government spending.

We have estimated effects of job practice for participants entering the programme between 1999 and 2006. On average the programme had a moderately sized positive effect for the participants-the expected time to work for the unemployed participants was reduced by around six per cent over a 700 days long follow-up horizon counted from the programme start date. Participation also gave rise to higher future labour income and a reduction in social assistance take-up. When we compare job practice with labour market training, we get the somewhat paradoxical result that job practice participants would have gained more from training, while the training participants would have gained equally much from both programmes. A re-shuffling of participants between the programmes, hence, would have been associated with higher average effects.

Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence.

Evaluating hiring incentives: Evidence from Italian firms Active Labor Market Policies participation has been intense in recent decades, especially during the recovery from the financial crisis. The economic literature generally concentrates on subsequent labor market performance of unemployed people that have participated to training programs or have spent a period in a subsidised job. The effects of a programme on firms’ behaviour have rarely been evaluated. Based on this argument, this paper analyses the effect of hiring incentives on firms’ employment. At this aim, we use micro-data drawn from Rilevazione su Imprese Lavoro (RIL), a survey conducted by Inapp in 2010, 2015 and 2018 on a representative sample of limited liability and partnership firms. Applying a policy evaluation framework, we demonstrate that the use of incentives causes a significant increase of the share of newly hired workers in the shortrun. Moreover, we show that the overall positive effect of hiring incenti...

for very helpful insights. The ONS Virtual Microdata Lab ensured access to ONS Data, Alberta Criscuolo helped with the EU legislation, Cong Peng helped with maps, and Mehtap Polat provided excellent research assistance. This work contains statistical data from ONS that is Crown copyright and reproduced with the permission of the controller of HMSO and Queen's Printer for Scotland. The use of the ONS statistical data in this work does not imply the endorsement of the ONS in relation to the interpretation or analysis of the statistical data. This work uses research datasets that may not exactly reproduce National Statistics aggregates. The opinions expressed and arguments employed herein are solely those of the authors and do not necessarily reflect the official views of the OECD or its member countries.

This paper is a call to arms. But it is a call to arms to wage war not on the economy that sustains us all, but on the new virus that threatens the lives of many. While COVID-19 can and will kill many individuals, it cannot seriously endanger the dynamic life-system that underlies our civilization. That can only occur through massive and misdirected government intervention--by what I have called the "interventionist storm". This paper also proposes a general dynamic theory to uniquely analyse this issue and to offer a new policy program. For UPDATE # 1 (April 2020) see my paper "COVID-19 and the Great Lockdown Fiasco".

THE LESSONS OF THE GREAT LOCKDOWN HAVE STILL NOT BEEN LEARNT (as of 7 July 2020). Before global lockdown in late march 2020, the above paper made the powerful prediction that by waging war on the economy rather than the virus, the world would descend into deep depression. With second waves appearing in various regions throughout the world--notably in parts of the USA, Spain, Israel, Serbia, and in the Australian state of Victoria--uncomprehending governments are reimposing lockdown rather than gearing up their economies to fight the virus. People in these regions are beginning to rebel, sometimes violently, against this economic and social repression. If this renewed interventionism continues, and spreads internationally, the outcome in terms of living standards and lives will be disastrous. The societal dynamics of the Western world is beginning to falter. My recent IGDS Working Paper # 21 (May 2020) "Will the world ever recover from the Great Lockdown? Counting the costs of waging war on the economy", examines the world's prospects over the rest of this century.

This paper studies how NewStart Jobs (Nystartsjobb) and Employment Subsidies (Anstallningsstod) affect Swedish firms. We study effects on the number of employees, firm performance and other firm level outcomes. We use Swedish administrative data from the period 1998-2008. One result is that treated firms substantially outperform other re-cruiting firms after hiring through subsidies, both in terms of the number of employees and in terms of various production measures, despite having identical pre-match trajecto-ries. This pattern is clear for the period with Employment Subsidies, but less clear for the period with New Start Jobs. For New Starts Jobs we instead see that they have a clear pos-itive effect on firms’ survival rates. Overall, our results suggest that targeted employment subsidies can have large positive effects on post-match outcomes of the hiring firms.