Permanent Wage Cost Subsidies for Older Workers: An Effective Tool for Increasing Working Time and Postponing Early Retirement?

Arbeitspapier

In several OECD countries age-targeted wage subsidies have been introduced to increase the employment of older workers, but evidence on their effectiveness is scarce. This paper examines the effects of a permanent wage cost subsidy in Belgium on the employment rate, working time and hourly wage. We estimate these effects by integrating Inverse Probability Weighting in a, possibly trend-adjusted, Difference-in-Differences of endogenously sampled repeated cross sections. We find small positive short-run impacts on working time and larger ones on the employment rate, but only for employees at high risk of leaving to early retirement. The wage is not affected.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 8988

Classification and Topics

• Classification: Wirtschaft ; Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination ; Single Equation Models; Single Variables: Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions ; Demographic Economics: Public Policy
• Subject: wage cost subsidies ; older workers ; weighted Difference-in-Differences ; endogenous sampling

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Albanese, Andrea ; Cockx, Bart
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/110709
• Last update: 10.03.2025, 11:44 AM CET