Dylan Glover will present: "Are Active Labor Market Policies Directed at Firms Effective?”

with Yann Algan and Bruno Crépon

To get a Zoom-invitation, contact the seminar organisers: AME Labour Economics

 

Abstract

We evaluate the effect of an innovative active labor market policy (ALMP) implemented by the French Public Employment Service (PES) aimed at reducing hiring costs for thousands of small and medium sized firms. We find that this policy significantly increased the labor demand of treated firms. They increase the number of vacancies posted with the PES and they hire more employees with no discernable effect on exits. The hiring effect is composed of registered jobseekers and also firm-to-firm transfers. The increase in firm labor demand is consistent with a drop in vacancy costs due to a shift in the prescreening and filtering burden of the recruitment process away from the firm to the PES counselor. These results suggest that ALMPs directed at firms may be a valuable addition to the labor policy toolkit, yet care must be taken due to firm-level displacement effects.