ROOM : P02

Mathilde Pourtois – Cashing In On Hiring: Do Subsidies Truly Boost Employment Prospects for Low-Educated Youths? Evidence from Belgium

Targeted labour cost reduction is a popular policy tool for addressing unemployment among disadvantaged groups in the labour market. This paper evaluates the effectiveness of a hiring subsidy targeted at young jobseekers with at most a high school degree in Wallonia, the French-speaking region of Belgium. Using administrative data, we exploit the age eligibility requirement to estimate the impact of the subsidy on employment prospects of the eligible population. We conclude that the subsidy does not generate new job opportunities for the targeted youths within one year of unemployment. The take-up of the subsidy results in a complete deadweight loss. Additionally, we find no significant impact on duration spent in employment within two and a half years of unemployment.