This paper addresses the question of why prolonged regional unemployment differentials tend to persist even after their proximate causes have been reversed (e.g., after wages in the highunemployment regions have fallen relative to those in the low-unemployment regions). We suggest that the...

Targeted wage subsidies paid to employers are an important element of active labour market policies in Germany. This paper uses propensity score matching to investigate their effect on subsidised hard-to-place workers. In a first scenario, we estimate the average treatment effect of a subsidy on...