Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/295827 
Year of Publication: 
2024
Series/Report no.: 
IZA Discussion Papers No. 16804
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
To extend the labour market participation of seniors, numerous countries provide subsidies to incentivise their recruitment or employment. Prior research demonstrates that the effectiveness of such subsidies is rather unsatisfactory, although the reasons for this inadequacy remain unclear. Therefore, we examined negative employer perceptions triggered by eligibility for such subsidies that might explain this disappointing effectiveness. To this end, we set up a vignette experiment in which 292 genuine recruiters assessed fictitious candidates on their hireability and underlying productivity estimations. These candidates differed experimentally in their eligibility for a hiring subsidy targeted at the unemployed aged 58 or over. Our results indicate that the subsidy has a negative effect on their hiring outcomes. This adverse effect is explained by negative perceptions that counteract the financial incentive. Specifically, the subsidised candidates signal lower physical and technological skills along with an augmented difficulty in hiring and labour inspection.
Subjects: 
hiring discrimination
senior workers
labour market programmes
hiring subsidy
signalling effect
vignettes
JEL: 
J14
J38
J71
Document Type: 
Working Paper

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