Hiring subsidies, job creation and job destruction

Sagiri Kitao, Ayşegül Şahin, Joseph Song

Research output: Contribution to journalArticlepeer-review

6 Citations (Scopus)


We quantify the effects of hiring subsidies using the model of Mortensen and Pissarides (2003). The job creation effect can be large in a weak labor market. However, in the long-run, subsidies raise the wage and equilibrium unemployment.

Original languageEnglish
Pages (from-to)248-251
Number of pages4
JournalEconomics Letters
Issue number3
Publication statusPublished - 2011 Dec 1


  • Employment
  • Hiring subsidy
  • Unemployment

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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