Kitao, Sagiri; Şahin, Ayşegül; Song, Joseph - In: Economics Letters 113 (2011) 3, pp. 248-251
We quantify the effects of hiring subsidies using the model of Mortensen and Pissarides (2003). The job creation effect can be large in a weak labor market. However, in the long-run, subsidies raise the wage and equilibrium unemployment.