The Employment Effects of Low-Wage Subsidies

By Kristiina Huttunen, Jukka Pirttilä, Roope Uusitalo. Social Science Research Network, 2010

202 citations recorded by the source corpus.

Low-wage subsidies are often proposed as a solution to the unemployment problem among the low skilled but the empirical evidence on their effects is still scarce. This paper examines the employment effects of a Finnish payroll tax subsidy scheme, which is targeted at the employers of older, full-time, low-wage workers. The system's clear eligibility criteria open up an opportunity for a reliable estimation of the causal impacts of the subsidy scheme. Our results indicate that the subsidy system had no effect on the employment rate or wages of the eligible groups, but it increased slightly working hours among those already at work.

View Paper: https://www.semanticscholar.org/paper/6854a0b4a4e19df2d82d0b4bec3f5cbedf5a5607

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Citations in the corpus

• The Effectiveness of Hiring Credits (2019, background): “8Indeed, Goos and Konings (2007), Huttunen et al. (2013), Bennmarker et al. (2009), Egebark and Kaunitz (2013) and Skedinger (2014) nd rather small employment e¤ects of permanent payroll tax reduction.”