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Matthieu Delpierre
''The impact of hiring subsidies on survival of heterogeneous jobs''
( 2022, Vol. 42 No.2 )
While hiring subsidies are expected to stimulate the creation of jobs, the literature highlights that the wage increases that may result from these subsidies could also increase the number of job destructions. In the presence of wage rigidities, this effect is irrelevant. This paper explores the likely mechanism by which hiring subsidies tend to modify job composition with more low productivity jobs entering the market. Given that these jobs on average survive less long, this composition effect increases the job destruction rate. Also, the share of subsidized jobs increases with the subsidy.
Keywords: Hiring subsidies; job heterogeneity; job survival; matching model
JEL: J6 - Mobility, Unemployment, and Vacancies: General
Manuscript Received : Feb 09 2022 Manuscript Accepted : Jun 30 2022

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