TY  - RPRT
        AU  - Jahn, Elke J.
AU  - Wagner, Thomas
        TI  - Do Targeted Hiring Subsidies and Profiling Techniques Reduce Unemployment?
        PY  - 2008/Oct/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 3768
        UR  - https://www.iza.org/publications/dp3768
        AB  - To reduce unemployment targeted hiring subsidies for long-term unemployed are often recommended. To explore their effect on employment and wages, we devise a model with two types of unemployed and two methods of search, a public employment service (PES) and random search. The eligibility of a new match depends on the applicant's unemployment duration and on the method of search. The hiring subsidy raises job destruction and extends contrary to Mortensen-Pissarides (1999, 2003) the duration of a job search, so that equilibrium unemployment increases. Like the subsidy, organizational reforms, which advance the search effectiveness of the PES, crowd out the active jobseekers and reduce overall employment as well as social welfare. Nevertheless, reforms are a visible success for the PES and its target group, as they significantly increase the service's placement rate and lower the duration of a job search via the PES.
        KW  - matching model
KW  - hiring subsidy
KW  - endogenous separation rate
KW  - active labour market policy
KW  - PES
KW  - random search
        ER  -