Targeted impacts of salary subsidies: A developing country perspective

Among the employability support programs, there are those that promote employability through training and those that offer wage subsidies to reduce costs. This study evaluates the impact of the Moroccan 'IDMAJ' program, which falls into the latter category. The results reveal a positive impact of 10.3% on the employment of beneficiaries compared to non-beneficiaries. From a qualitative perspective, the program also influences job quality and the alignment between training and employment, with effects moderated by three key variables: gender, region, and age, which are crucial for targeting. For men, the program improved employment probability by 12.27% and reduced unemployment by 9.49%, while for women, these figures were 10.66% and 7.23%, respectively. The program's effects varied by age, positively impacting employment and job quality for those under 25 and those over 30. Regionally, beneficiaries from the Grand Casablanca area saw a 7.93% increase in employment probability and a 16.3% increase in access to social security compared to non-beneficiaries. From the employers' perspective, the program led 23.8% of employers to recruit more candidates, 10.2% to hire different profiles than they would have otherwise, and 31.4% to recruit earlier than planned. The contribution of this article is that it evaluates the impact of this program on downgrading and employment quality from a subnational perspective and across different strata, with an additional focus on employer perceptions.