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Hiring subsidies for people with a disability: do they work?
Sergi Jiménez-Martín1, Arnau Juanmartí Mestres2, Judit Vall Castelló3
1Universitat Pompeu Fabra, Barcelona GSE and FEDEA, Barcelona, Spain.
Summary
Hiring subsidies for people with disabilities in Spain were largely ineffective for employment transitions. Some policies even increased transitions to disability insurance (DI), with employment protection measures showing unintended negative consequences.
Area of Science:
- Labor Economics
- Disability Policy
- Social Welfare Programs
Background:
- Hiring subsidies are policy tools aimed at increasing employment for specific groups.
- People with disabilities often face significant barriers to labor market participation.
- Understanding the impact of targeted subsidies is crucial for effective disability employment policy.
Purpose of the Study:
- To evaluate the effectiveness of a Spanish hiring subsidy scheme for individuals with disabilities.
- To analyze the scheme's impact on transitions to employment and entry into disability insurance (DI).
- To assess the role of employment protection components within the subsidy.
Main Methods:
- Utilized a difference-in-differences approach.
- Exploited regional implementation timing of the subsidy scheme in Spain (1990-2014).
- Estimated impacts on DI beneficiaries' employment transitions and individuals' DI entry propensity.
Main Results:
- The subsidy scheme generally proved ineffective in incentivizing transitions to employment.
- In some instances, the scheme was linked to an increased propensity for individuals to enter DI.
- An employment protection component led to fewer permanent jobs, more temporary jobs, and increased DI entry.
Conclusions:
- The evaluated hiring subsidy scheme had limited success in promoting employment for people with disabilities.
- Employment protection measures within subsidies may create unintended negative outcomes for this population.
- Policy design for disability employment support requires careful consideration of potential adverse effects.
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