No. 1006: Female-Targeted Hiring Subsidies, Firm Learning, and Women’s Employment
Mimosa Distefano London School of Economics, CEP, RFBerlin Lorenzo Incoronato University of Naples Federico II, CSEF, CESifo, RFBerlin Anna Raute Queen Mary University of London, CEPR, CESifo, RFBerlin
August 21, 2026
Abstract
Women often struggle to re-enter employment after career breaks, possibly because employers are uncertain about their productivity. We study whether hiring subsidies help firms overcome this uncertainty and hire from this group. Exploiting an Italian policy that temporarily cut payroll taxes for women hired from non-employment, we find that firms persistently hire more women with career breaks, including mothers, following subsidy adoption. Consistent with employer learning about target-group productivity, firms with better initial matches later hire more from this group. Subsidized workers also show stronger labor-market attachment. These findings suggest demand-side interventions can complement supply-side policies in addressing gender gaps.
J.E.L classification codes: J16, J23, H25, D83
Keywords: gender employment gap; mothers; hiring subsidies; employer learning; firm hiring behavior