We evaluate the potential of wage subsidy programs for reducing non-employment of the disabled by exploiting a reform of the Danish Flexjob scheme targeted towards employing the long-term (partially) disabled. Firms received a salary reimbursement for all employees granted a Flexjob. We examine whether a change from full to partial reimbursement to governmental units affected the share of Flexjobs allocated to retained (insiders) versus non-employed hirees (outsiders). After the reform, the composition of hires changed substantially in favor of insiders, both in absolute and relative terms. A reduction in subsidies thus leads to a decrease in the hiring of the non-employed disabled.
Url or DOI
Country
Denmark
Publication Year
2015
Employment incentives
Public sector employment
Labour market status
Employed
Unemployed (All cat.)
Vulnerable groups
Disabled
Funding Source
Other
Outcome Variable
Employment status
Data Source
Administrative
Evaluation Method
DID