Can subsidized employment tackle long-term unemployment? Experimental evidence from North Macedonia
Series: Working Papers. 2022.
Author: Alex Armand, Pedro Carneiro, Federico Tagliati and Yiming Xia.
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Abstract
This paper examines the impact of an experiment in North Macedonia in which
vulnerable unemployed individuals applying to a subsidized employment program were
randomly selected to attend job interviews. Employers hiring a new employee from the
target population receive a subsidy covering the wage cost of the worker for the first six
months. Using administrative employment data, we find that attending the job interview
led to an increase of 15 percentage points in the likelihood of being employed 3.5 years
after the start of the intervention. We also find positive and statistically significant effects
on individuals’ non-cognitive and work-related skills.