Working Paper

Can Wage Subsidies Boost Employment in the Wake of an Economic Crisis? : Evidence from Mexico

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collection.link.5
https://openknowledge.worldbank.org/handle/10986/9
collection.name.5
Policy Research Working Papers
dc.contributor.author
Bruhn, Miriam
dc.date.accessioned
2016-04-26T16:30:04Z
dc.date.available
2016-04-26T16:30:04Z
dc.date.issued
2016-03
dc.date.lastModified
2021-04-23T14:04:19Z
dc.description.abstract
The rise in unemployment during an economic crisis poses a significant concern to policy makers. This paper measures the effect of a program in Mexico that granted firms in certain industries wage subsidies if they decided to keep their workers instead of letting them go during the recent economic crisis. The analysis uses monthly administrative data on employment at the industry level, along with propensity score matching to construct groups of eligible and ineligible durable goods manufacturing industries that display statistically identical pre-program trends in employment. Difference-in-difference results show a positive but not statistically significant effect of the wage subsidies on employment during the program’s eight-month duration, ranging from 5.7 to 13.2 percent in magnitude, depending on the specification. The size of the effect increases to 24 percent after the program ended and the results indicate that employment after the program recovered faster in eligible industries than in ineligible industries.
en
dc.identifier
http://documents.worldbank.org/curated/en/2016/03/26085106/can-wage-subsidies-boost-employment-wake-economic-crisis-evidence-mexico
dc.identifier.uri
http://hdl.handle.net/10986/24149
dc.language
English
dc.language.iso
en_US
dc.publisher
World Bank, Washington, DC
dc.relation.ispartofseries
Policy Research Working Paper;No. 7607
dc.rights
CC BY 3.0 IGO
dc.rights.holder
World Bank
dc.rights.uri
http://creativecommons.org/licenses/by/3.0/igo/
dc.subject
FIRING RESTRICTIONS
dc.subject
JOBS
dc.subject
PRODUCING GOODS
dc.subject
UNEMPLOYMENT
dc.subject
EMPLOYMENT
dc.subject
LABOR MARKET
dc.subject
TRAINING COSTS
dc.subject
WORKERS
dc.subject
WAGE‐SUBSIDY
dc.subject
SEVERANCE PAYMENTS
dc.subject
LABOR MARKET PROGRAMS
dc.subject
WAGES
dc.subject
WAGE SUBSIDY
dc.subject
SKILLED WORKERS
dc.subject
MINIMUM WAGE
dc.subject
ACTIVE LABOR MARKET PROGRAMS
dc.subject
WAGE SUBSIDIES
dc.subject
TRAINING COSTS
dc.subject
JOB TENURE
dc.subject
LABOR FORCE
dc.subject
PROBIT REGRESSION
dc.subject
WORK SCHEDULE
dc.subject
UNEMPLOYED WORKERS
dc.subject
JOB
dc.subject
FIRING RESTRICTIONS
dc.subject
RISING UNEMPLOYMENT
dc.subject
LABOR STATISTICS
dc.subject
PRIVATE SECTOR
dc.subject
MINIMUM WAGES
dc.subject
DISPLACEMENT EFFECT
dc.subject
WAGE SUBSIDY PROGRAM
dc.subject
LABOR MARKET POLICIES
dc.subject
EMPLOYMENT TRENDS
dc.subject
RISING UNEMPLOYMENT
dc.subject
ACTIVE LABOR
dc.subject
WAGE SUBSIDY PROGRAM
dc.subject
WAGE‐SUBSIDY PROGRAM
dc.subject
EMPLOYMENT LEVELS
dc.subject
MANUFACTURING INDUSTRIES
dc.subject
LABOR MARKET
dc.subject
LABOR MARKET POLICIES
dc.subject
EMPLOYMENT LEVELS
dc.subject
UNEMPLOYED WORKERS
dc.subject
EMPLOYMENT SUBSIDIES
dc.subject
DISPLACEMENT EFFECTS
dc.subject
CREATING JOBS
dc.subject
DISPLACEMENT
dc.subject
WORKER
dc.subject
EMPLOYEE
dc.subject
ACTIVE LABOR MARKET
dc.subject
MANUFACTURING INDUSTRY
dc.subject
COLLEGE GRADUATES
dc.subject
UNEMPLOYED
dc.subject
JOB LOSS
dc.subject
WAGE SUBSIDIES
dc.subject
INFORMAL EMPLOYMENT
dc.subject
MEDICAL CARE
dc.subject
LABOUR
dc.subject
EMPLOYMENT RETENTION
dc.subject
LABOR
dc.subject
DISADVANTAGED WORKERS
dc.subject
DISADVANTAGED WORKERS
dc.subject
TOTAL EMPLOYMENT
dc.subject
EMPLOYMENT PROSPECTS
dc.subject
WAGE SUBSIDY
dc.subject
EMPLOYMENT PROSPECTS
dc.subject
WAGE EMPLOYMENT SUBSIDIES
dc.subject
INDUSTRIES
dc.subject
WAGE EMPLOYMENT
dc.subject
MINIMUM WAGES
dc.subject
MANUFACTURING INDUSTRIES
dc.subject
EMPLOYEES
dc.title
Can Wage Subsidies Boost Employment in the Wake of an Economic Crisis?
en
dc.title.subtitle
Evidence from Mexico
en
dc.type
Working Paper
en
okr.associatedcontent
https://openknowledge.worldbank.org/handle/10986/34409 Journal article version
okr.crossref.title
Can Wage Subsidies Boost Employment in the Wake of an Economic Crisis? Evidence from Mexico
okr.date.disclosure
2016-03-17
okr.doctype
Publications & Research
okr.doctype
Publications & Research :: Policy Research Working Paper
okr.docurl
http://documents.worldbank.org/curated/en/2016/03/26085106/can-wage-subsidies-boost-employment-wake-economic-crisis-evidence-mexico
okr.googlescholar.linkpresent
yes
okr.identifier.doi
10.1596/1813-9450-7607
okr.identifier.externaldocumentum
090224b08420ddd4_1_0
okr.identifier.internaldocumentum
26085106
okr.identifier.report
WPS7607
okr.imported
true
okr.language.supported
en
okr.pdfurl
http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2016/03/17/090224b08420ddd4/1_0/Rendered/PDF/Can0wage0subsi0evidence0from0Mexico.pdf
en
okr.region.administrative
Latin America & Caribbean
okr.region.country
Mexico
okr.topic
Social Protections and Labor :: Wages, Compensation & Benefits
okr.topic
Macroeconomics and Economic Growth :: Economic Conditions and Volatility
okr.topic
Social Protections and Labor :: Labor Markets
okr.topic
Macroeconomics and Economic Growth :: Taxation & Subsidies
okr.unit
Finance and Private Sector Development Team, Development Research Group

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