Abstract
Abstract We analyze the effects of an ALMP for disadvantaged workers implemented in a depressed area of Italy. Using propensity-score matching, we find that a) the employment subsidy had a positive effect for participants on both the probability of finding a job and income, b) the outcome of the policy was more positive for women, and c) the program was more effective for older and less-educated female workers. Using data on previous contacts between workers and firms and on informal channels for job search activity, we ultimately explore the role of the program in promoting the transition from informal to salaried employment.
Highlights
Women’s participation in the labor market is a classic topic in the labor economics literature, and gender issues are receiving increasing emphasis in the policy agenda
Using propensity-score matching, we find that a) the employment subsidy had a positive effect for participants on both the probability of finding a job and income, b) the outcome of the policy was more positive for women, and c) the program was more effective for older and less-educated female workers
As Bergemann and Van den Berg (2008) suggest in their recent survey of the literature on the effects of the active labor market programs (ALMPs) for women in Europe, an impact evaluation analysis is of primary importance if we want to deepen our knowledge of the forces driving gender differences in participation rates and income levels
Summary
Women’s participation in the labor market is a classic topic in the labor economics literature (see, for example, Killingsworth and Heckman, 1986), and gender issues are receiving increasing emphasis in the policy agenda. Using the answers received in our survey to the question, “Before being hired, did you have the chance to collaborate with the firm that hired you?” we find that the sample of treated individuals has a significantly higher probability of having had previous contact with the firm Overall, these three pieces of evidence are consistent with the hypothesis that, at least in part, the ICS program has been effective in creating new employer-employee matches and in promoting the transition from informal employment to formal jobs. The interventions directed toward firms were not eventually implemented, and much more attention was paid to the labor supply side of the program through a mixture of policies including employment subsidies, counseling, tutoring and matching services.7 The latter service consisted of the possibility for unemployed workers to be directly matched to a vacancy in a firm that exactly required her/his qualification profile. From the initial sample of 877 individuals, only 795 were eventually hired by firms, with the difference attributable both to dropouts (27) and to firms that decided not to hire the worker following the probation period (55)
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