TY  - RPRT
        AU  - Abel, Martin
AU  - Carranza, Eliana
AU  - Geronimo, Kimberly
AU  - Ortega, Maria Elena
        TI  - Can Temporary Wage Incentives Increase Formal Employment? Experimental Evidence from Mexico
        PY  - 2022/Nov/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 15740
        UR  - https://www.iza.org/index.php/publications/dp15740
        AB  - Formal sector entry-level jobs in Mexico offer low starting salaries but substantial wage growth. This paper experimentally tests whether a six-months wage incentive can increase formal employment among secondary school graduates. Combining survey and high-frequency social security data, the paper shows that the incentive increases formal employment among vocational school graduates by 4.2 percentage points (14.5 percent) over the first two years driven by a 5 percentage point (25 percent) increase in permanent formal jobs. These employment gains are due to both extensive and intensive margin effects. Treatment effects are concentrated among youths with binding reservation wages who also tend to underestimate formal wage growth. 
        KW  - youth employment
KW  - wage subsidy
KW  - formal employment
KW  - reservation wages
        ER  -