The Korean Journal of Economic Studies
A Study on the Employment Effects of Additional Youth Employment Subsidy
Cheolsung Park (Hanyang University) and Kang-Shik Choi (Yonsei University)Year 2021Vol. 69No. 2
Using the administrative data of applicants for Additional Youth Employment Subsidy (AYES) Program from October 2017 to May 2019 combined with the Employment Insurance Database, we study the characteristics of the firms that received AYES, differences between the participant and non-participant firms, and the employment effects of AYES. After controlling for the number of employees as of May and December 2016 and 2017, location, number of years in business, industry, and the status of  participation in the Tomorrow Mutual Aid Program for Young Employees (TMAPYE), we find that the participant firms have hired on average 5 more persons per annum than the non-participant firms have. We estimate the net employment effect of AYES using matching and instrument variable estimation methods. Our estimation results suggest that the net employment effect of AYES is 60 to 70 percent of the number of subsidized employees.