Unpacking the small effects of subsidized employment: the role of gender and parenthood

Sarah Gharbi, Valentina Melentyeva, Eloïse Menestrier

Subsidized employment has been widely used to tackle unemployment. Nevertheless, our understanding of the gender-specific effects of these policies remains limited. In this study, we assess the impact of a subsidized employment program in France allowing for heterogeneous effects across gender. We apply a dynamic difference-in-differences approach where older non- participating cohorts serve as a control group.

Starting with the investigation of average effects, our findings reveal robust positive effects on annual earnings, working hours, and job conditions following program completion. However, the effect on the employment probability — the primary objective of these policies — is close to 0 and only marginally significant. In contrast, when considering gender heterogeneity, our analysis indicates significant and positive effects on all outcomes for men. However, for women, the program fails to enhance the likelihood of employment. As parenthood contributes significantly to the prevailing gender inequality within the labor market, these prompt us to delve into the impact of childbirth on the labor supply of young female participants.

Our findings highlight how the occurrence of such an event and its timing are crucial within the context of this program. The null effect on the employment probability is driven by smaller effects for fathers and particularly mothers, who do not improve their employment prospects. In contrast, the program increases significantly the likelihood of employment of childless young men. Earnings, hours worked and job quality improve for all groups except women giving birth during the program and therefore dropping out.

As a next step, we seek to investigate the underlying mechanisms to comprehend the origins of such disparities, probing whether they stem from employer preferences, caseworkers influence or changes in the labor supply of the beneficiaries.

Membres du projet :

  • Sarah Gharbi, University of Cologne
  • Valentina Melentyeva, University of Cologne
  • Eloïse Menestrier, CY Cergy Paris Université

État du projet : en cours

Ce projet est financé par la chaire Sécurisation des Parcours Professionnels.