This article evaluates the effectiveness of hiring subsidies targeted to people with disabilities.
By exploiting the timing of implementation among the different Spanish regions of a
subsidy scheme implemented in Spain during the period 1990-2014, we employ a differencesin-
differences approach to estimate the impact of the scheme on the probability of DI beneficiaries
of transiting to employment and on the propensity of individuals of entering the
DI program. Our results show that the introduction ...
This article evaluates the effectiveness of hiring subsidies targeted to people with disabilities.
By exploiting the timing of implementation among the different Spanish regions of a
subsidy scheme implemented in Spain during the period 1990-2014, we employ a differencesin-
differences approach to estimate the impact of the scheme on the probability of DI beneficiaries
of transiting to employment and on the propensity of individuals of entering the
DI program. Our results show that the introduction of the subsidy scheme is in general
ineffective at incentivizing transitions to employment, and in some cases it is associated
with an increased propensity of transiting to DI. Furthermore, we show that an employment
protection component incorporated to the subsidy scheme, consisting in the obligation
for the employer to maintain the subsidized worker in employment, is associated with less
transitions to permanent employment, more transitions to temporary employment and more
transitions to DI, suggesting that these type of employment protection measures can have
undesired effects for people with disabilities.
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