Hiring subsidies for low-educated unemployed youths are ineffective in a tight labor market

We evaluate the impact of hiring subsidies for unemployed jobseekers in Wallonia, the Frenchspeaking region in the south of Belgium. The special feature of these subsidies is that they are more readily available for low-educated youths, who are eligible from registration as a jobseeker or a few months later. In contrast, others must wait 12 months to be eligible. We exploit this difference in a regression discontinuity design and show that earlier access to subsidies does not enhance the jobfinding rate of the target group. We attribute the lack of effect to the pre-pandemic tightening of the labor market.