Evaluating hiring incentives: evidence from Italian firms

Abstract

This paper analyses the effect of hiring incentives on firms’ employment. At this aim, we use micro-data drawn from Rilevazione su Imprese Lavoro (RIL), a survey conducted by Inapp in 2010, 2015 and 2018 on a representative sample of limited liability and partnership firms. Applying a policy evaluation framework, we demonstrate that the use of incentives causes a significant increase of the share of newly hired workers in the shortrun. Moreover, we show that the overall positive effect of hiring incentives are driven by industrial sector rather than services one. Finally, these results are robust to econometric methods that controls for both firms’ unobserved heterogeneity and endogeneity issues.