Can hiring subsidies benefit the unemployed? : hiring subsidies can be a very cost-effective way of helping the unemployed, but only when they are carefully targeted

Long-term unemployment can lead to skill attrition and have detrimental effects on future employment prospects, particularly following periods of economic crises when employment growth is slow and cannot accommodate high levels of unemployment. Addressing this problem requires the use of active labor market policies targeted at the unemployed. In this context, hiring subsidies can provide temporary incentives for firms to hire unemployed workers and, when sensibly targeted, are a very costeffective and efficient means of reducing unemployment, during both periods of economic stability and recovery.