NOVAFRICA publication in the Journal of Development Economics: “Can Subsidized Employment Reduce Long-Term Unemployment?”

A new study in the Journal of Development Economics explores whether wage subsidies can help break the cycle of long-term unemployment.

In a large-scale randomized experiment in North Macedonia, NOVAFRICA Nova School of Business and Economics Professor Alex Armand, together with NOVAFRICA External Member Pedro Carneiro, Federico Tagliati, and Yiming Xia, tested a simple idea:

Match unemployed individuals to jobs

Subsidize half of their first-year wage and training costs

Key findings:

✅ Attending a job interview increased employment by +15 percentage points—even 3.5 years later

✅ Being hired raised employment by +50 percentage points

✅ The largest gains were seen among those with the weakest prior labour market attachment

📄 Read the full JDE article here