Low-wage subsidies are often proposed as a solution to the unemployment problem among the low skilled but the empirical evidence on their effects is still scarce. This paper examines the employment effects of a Finnish payroll tax subsidy scheme, which is targeted at the employers of older, full-time, low-wage workers. The system's clear eligibility criteria open up an opportunity for a reliable estimation of the causal impacts of the subsidy scheme. Our results indicate that the subsidy system had no effect on the employment rate or wages of the eligible groups, but it increased slightly working hours among those already at work. Url or DOI https://doi.org/10.1016/j.jpubeco.2012.09.007 Authors Kristina Huttunen Jukka Pirttila Roope Uusitalo Country Finland Publication Year 2013 Ranges Intervention Intervention Start Year 2006 Intervention End Year 2010 Evaluation Evaluation Start Year 2006 Evaluation End Year 2007 Policy field Employment incentives Private sector employment incentives Target group Labour market status Employed Details Funding Source Other Outcome Variable Employment status Data Source Administrative Evaluation Method DID
