The Effects of Subsidizing Social Security Contributions : Job Creation or Informality Reduction?
This paper evaluates the impact of an employment subsidy scheme covering employers’ social contribution costs on registered employment in small firms in Turkey. It utilizes a rich, firm-level administrative data set with monthly frequency, which al...
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| Format: | Working Paper |
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World Bank, Washington, DC
2022
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| Online Access: | http://documents.worldbank.org/curated/undefined/685191642611488161/The-Effects-of-Subsidizing-Social-Security-Contributions-Job-creation-or-Informality-Reduction http://hdl.handle.net/10986/36850 |
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okr-10986-368502022-01-21T05:10:38Z The Effects of Subsidizing Social Security Contributions : Job Creation or Informality Reduction? Asik, Gunes Bossavie, Laurent Kluve, Jochen Nas Ozen, Efsan Nebiler, Metin Oviedo, Ana Maria EMPLOYMENT SUBSIDY FORMAL EMPLOYMENT EMPLOYER SOCIAL SECURITY CONTRIBUTION SMALL FIRMS INFORMALITY This paper evaluates the impact of an employment subsidy scheme covering employers’ social contribution costs on registered employment in small firms in Turkey. It utilizes a rich, firm-level administrative data set with monthly frequency, which allows for closely following the dynamics of registered employment in firms before and after the implementation of the subsidy. The empirical approach utilizes the geographically targeted implementation of the subsidy to estimate its effects using a difference-in-difference specification. The paper finds that the subsidy scheme had a sizable and positive impact on registered employment in small firms. The results are robust across specifications and to the choice of the control group. Positive effects on formal employment are also fairly constant and sustained over time. Corroborative evidence suggests that the positive effects on registered employment are mainly driven by the formalization of existing workers as opposed to new job creation. Therefore, the results indicate that social security contribution subsidies in small firms can be effective in reducing informality in contexts where informal employment remains common. 2022-01-20T17:47:21Z 2022-01-20T17:47:21Z 2022-01 Working Paper http://documents.worldbank.org/curated/undefined/685191642611488161/The-Effects-of-Subsidizing-Social-Security-Contributions-Job-creation-or-Informality-Reduction http://hdl.handle.net/10986/36850 English Policy Research Working Paper;No. 9904 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Europe and Central Asia Turkey |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
EMPLOYMENT SUBSIDY FORMAL EMPLOYMENT EMPLOYER SOCIAL SECURITY CONTRIBUTION SMALL FIRMS INFORMALITY |
| spellingShingle |
EMPLOYMENT SUBSIDY FORMAL EMPLOYMENT EMPLOYER SOCIAL SECURITY CONTRIBUTION SMALL FIRMS INFORMALITY Asik, Gunes Bossavie, Laurent Kluve, Jochen Nas Ozen, Efsan Nebiler, Metin Oviedo, Ana Maria The Effects of Subsidizing Social Security Contributions : Job Creation or Informality Reduction? |
| geographic_facet |
Europe and Central Asia Turkey |
| relation |
Policy Research Working Paper;No. 9904 |
| description |
This paper evaluates the impact of an
employment subsidy scheme covering employers’ social
contribution costs on registered employment in small firms
in Turkey. It utilizes a rich, firm-level administrative
data set with monthly frequency, which allows for closely
following the dynamics of registered employment in firms
before and after the implementation of the subsidy. The
empirical approach utilizes the geographically targeted
implementation of the subsidy to estimate its effects using
a difference-in-difference specification. The paper finds
that the subsidy scheme had a sizable and positive impact on
registered employment in small firms. The results are robust
across specifications and to the choice of the control
group. Positive effects on formal employment are also fairly
constant and sustained over time. Corroborative evidence
suggests that the positive effects on registered employment
are mainly driven by the formalization of existing workers
as opposed to new job creation. Therefore, the results
indicate that social security contribution subsidies in
small firms can be effective in reducing informality in
contexts where informal employment remains common. |
| format |
Working Paper |
| author |
Asik, Gunes Bossavie, Laurent Kluve, Jochen Nas Ozen, Efsan Nebiler, Metin Oviedo, Ana Maria |
| author_facet |
Asik, Gunes Bossavie, Laurent Kluve, Jochen Nas Ozen, Efsan Nebiler, Metin Oviedo, Ana Maria |
| author_sort |
Asik, Gunes |
| title |
The Effects of Subsidizing Social Security Contributions : Job Creation or Informality Reduction? |
| title_short |
The Effects of Subsidizing Social Security Contributions : Job Creation or Informality Reduction? |
| title_full |
The Effects of Subsidizing Social Security Contributions : Job Creation or Informality Reduction? |
| title_fullStr |
The Effects of Subsidizing Social Security Contributions : Job Creation or Informality Reduction? |
| title_full_unstemmed |
The Effects of Subsidizing Social Security Contributions : Job Creation or Informality Reduction? |
| title_sort |
effects of subsidizing social security contributions : job creation or informality reduction? |
| publisher |
World Bank, Washington, DC |
| publishDate |
2022 |
| url |
http://documents.worldbank.org/curated/undefined/685191642611488161/The-Effects-of-Subsidizing-Social-Security-Contributions-Job-creation-or-Informality-Reduction http://hdl.handle.net/10986/36850 |
| _version_ |
1764486022918307840 |