Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/223986
Authors: 
Leduc, Elisabeth
Tojerow, Ilan
Year of Publication: 
2020
Series/Report no.: 
IZA Discussion Papers No. 13544
Abstract: 
European countries have increasingly adopted wage subsidies for the sector of domestic services to reduce low-skilled unemployment. Yet, empirical evidence on their effectiveness is scarce. In this paper, we use Belgian administrative data to estimate how participation in the subsidized domestic services sector impacts the labour market outcomes of program participants. Our identification strategy rests on a dynamic event study difference-in-differences model combined with coarsened exact matching. Our findings indicate that such subsidies can be effective in reducing unemployment and inactivity, but only by increasing employment within the subsidized domestic services sector. We also find that program participation deteriorates physical health, thus increasing the worker's probability of claiming disability insurance benefits.
Subjects: 
wage subsidies
low-skilled workers
unemployment
disability
domestic services
personal and household services
female employment
JEL: 
J08
J24
J28
J38
Document Type: 
Working Paper

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