The Effectiveness of Hiring Credits

By Pierre Cahuc, Stéphane Carcillo, T. L. Barbanchon. Social Science Research Network, 2019

112 citations recorded by the source corpus.

This paper analyzes the effectiveness of hiring credits. Using comprehensive administrative data, we show that the French hiring credit, implemented during the Great Recession, had significant positive employment effects and no effects on wages. Relying on the quasi-experimental variation in labor cost triggered by the hiring credit, we estimate a structural search and matching model. Simulations of counterfactual policies show that the effectiveness of the hiring credit relied to a large extent on three features: it was non-anticipated, temporary and targeted at jobs with rigid wages. We estimate that the cost per job created by permanent hiring credits, either countercyclical or time-invariant, in an environment with flexible wages would have been much higher.

Subfields: Accounting, Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/f40aa5b88ed55f8c810a4d241a1bafcfd8d03b58

Citations in the corpus

• Cash holdings and labor heterogeneity:the role of skilled labor (2017, unknown): “Recent evidence also suggests the effectiveness of hiring credits in France (Cahuc, Carcillo, and Barbanchon 2015). above average state or sector wages, which, for some programs, reach 300% of mean wages.”