Hysteresis from employer subsidies
نویسندگان
چکیده
This paper uses administrative data to analyze a large and 8-year long employer payroll tax rate cut in Sweden for young workers aged 26 or less. We replicate previous results documenting that during the earlier years of reform, it raised youth employment among treated workers, driven by labor demand (as workers’ take-home wages did not respond). First, drawing on additional data, this then documents longer-run effects reform are twice as medium-run effects. Second, we document novel labor-demand-driven “hysteresis” from policy – i.e. persistent even after subsidy no longer applies along two dimensions. Over lifecycle, persist age out eligibility. Three repeal, remains elevated at maximal level formerly subsidized ages. These hysteresis more than double direct reform. Discrimination against job posting fell does bounce back potentially explaining our results.
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ژورنال
عنوان ژورنال: Journal of Public Economics
سال: 2021
ISSN: ['0047-2727', '1879-2316']
DOI: https://doi.org/10.1016/j.jpubeco.2021.104459