Policies supporting small businesses are popular among policymakers but often criticised by economists for their potential to distort the economy. This paper provides a comprehensive evaluation of a unique policy that subsidises the first employee. Empirically, we find that the policy led to a...

This paper discusses the potential introduction of permanent public subsidies to supplement the wages of low-paid workers in Italy, taking inspiration from Edmund Phelps' ideas on supporting the working poor. We consider how a negative taxation scheme for low-wage earners might address...