TY  - RPRT
        AU  - Dalle, Axana
AU  - Verhofstadt, Elsy
AU  - Baert, Stijn
        TI  - The Subsidy Trap: Explaining the Unsatisfactory Effectiveness of Hiring Subsidies for the Senior Unemployed
        PY  - 2024/Feb/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 16804
        UR  - https://www.iza.org/publications/dp16804
        AB  - 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.
        KW  - signalling effect
KW  - hiring subsidy
KW  - labour market programmes
KW  - senior workers
KW  - hiring discrimination
KW  - vignettes
        ER  -