July 2015

IZA DP No. 9184: Worker-level and Firm-level Effects of a Wage Subsidy Program for Highly Educated Labor: Evidence from Denmark

published in: Research Policy, 2016, 45 (9), 1939-1943

We study the effects of a Danish wage subsidy program for highly educated workers on the labor market outcomes of the persons participating in the program and on the performance of the firms that hired these subsidized workers. Using data on the population of program participants, both individuals and firms, we find that the program had positive effects on employment and wages the year individuals participate in the program. For wages, we also find positive and statistically significant effects for the two subsequent years. At the program participating firm level, we find statistically significant effects on the number of highly educated employees for both the period of program participation and the subsequent time period.