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The European Journal of Health Economics

, Volume 20, Issue 5, pp 669–689 | Cite as

Hiring subsidies for people with a disability: do they work?

  • Sergi Jiménez-Martín
  • Arnau Juanmartí Mestres
  • Judit Vall CastellóEmail author
Original Paper

Abstract

This article evaluates the effectiveness of hiring subsidies targeted to people with disabilities. By exploiting the timing of implementation among different Spanish regions of a subsidy scheme implemented in Spain during the period 1990–2014, we employed a difference-in-differences approach to estimate the impact of the scheme on the probability of disability insurance (DI) beneficiaries of transiting to employment and on the propensity of individuals of entering the DI program. Our results show that the introduction of the subsidy scheme is in general ineffective at incentivizing transitions to employment, and in some cases it is associated with an increased propensity of transiting to DI. Furthermore, we show that an employment protection component incorporated into the subsidy scheme, consisting in the obligation for the employer to maintain the subsidized worker in employment, is associated with less transitions to permanent employment, more transitions to temporary employment and more transitions to DI, suggesting that these type of employment protection measures can have undesired effects for people with disabilities.

Keywords

Disability Employment subsidies Labor market transitions Disability insurance Difference-in-differences 

JEL Classification

H24 H55 J08 J14 

Notes

Acknowledgements

We gratefully acknowledge financial support from Recercaixa for the 2014 project “Promoting the labour market integration of disabled workers: A policy evaluation exercise for Spain” and from the Spanish Ministry of Economy grants ECO2014-52238-R and ECO2017-83668-R. We thank seminar participants at CRES, Pompeu Fabra University, FEDEA, UNED, the Recercaixa-CRES Workshop on Disability Topics, the XXXVI Conference of the Spanish Health Economics Association and the Third EuHEA PhD Conference for their useful comments.

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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Universitat Pompeu Fabra, Barcelona GSE and FEDEABarcelonaSpain
  2. 2.Centre for Research in Health and EconomicsUniversitat Pompeu Fabra (CRES-UPF)BarcelonaSpain
  3. 3.Department of Economics and Institut d’Economia de Barcelona (IEB)Universitat de Barcelona and CRES-UPFBarcelonaSpain

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