Evaluating The Impact of Subsidies in Reducing Unemployment in Romania

Madalina Ecaterina Popescu,Andreea Muraru,Maria Isadora Lazar

doi:10.5171/2021.866265

Abstract

Having in mind the importance of effective Active Labour Market Policies (ALMPs) to boost employment, this paper aims to provide an impact study on employment for three types of active labour market measures implemented in Romania. These measures address companies who employ graduates of education institutions or unemployed persons over 45 years old or with only 3 years left before retirement.

Highlights

High unemployment rates are a constant challenge for labour markets in many countries
For the purpose of this paper, the authors will only focus on the impact of the first type of Active Labour Market Policies (ALMPs), on which the literature review is rather scarce
In order to quantify the impact of these active labour market measures addressed to companies who employ graduates or unemployed persons over 45 years old or with only 3 years left before retirement, a propensity score matching technique was applied

Summary

Introduction

High unemployment rates are a constant challenge for labour markets in many countries. Unemployment rates are increasing, especially in some economic sectors, imposing significant pressure on public policies and causing severe effects in terms of social implications. To combat such phenomenon within a limited timeframe has become a priority for governments. One such policy tool to help prevent a drastic makeover of the labour market consists in designing and implementing effective Active Labour Market Policies (ALMPs) to reduce unemployment and boost employment in one country. In order to properly design and implement such labour market measures, it is necessary to check their effectiveness, by conducting rigorous impact studies to assess the potential impact of such public policies upon the labour market. In case of a soon to be adopted policy, the assessment addresses its potential impact (ex-ante evaluation), while in case of an already implemented policy, the assessment focuses on the effects attributable to that policy (ex-post evaluation)

Objectives

Results

Conclusion