© Getty Images
Job seekers over the age of 58 for whom employers can receive a subsidy when hiring are assessed more negatively by those employers in terms of productivity. This is evident from a study by Ghent University, which De Morgen also reports on, which concludes that the possible subsidy arouses negative thoughts among employers.
Source: BELGA
Yesterday at 6:13 am
Doctoral researcher Axana Dalle, professor of labor economics Stijn Baert and professor of welfare economics Elsy Verhofstadt investigated the signaling effect of the target group reduction for job seekers aged 58 or older. They each presented 292 Flemish recruiters with four job candidates who randomly differed in terms of, among other things, gender, work experience, unemployment and whether the employer would be entitled to this target group reduction. The recruiters had to rate the applicants based on their chances of being hired and twenty perceptions regarding the applicant’s productivity and collaboration.
This has shown that candidates who qualify for the subsidy are less recommended to be invited for a job interview or to be finally hired. This is because they are seen as less productive, especially because they are said to be less physically strong and less technologically skilled. In addition, employers expect that the recruitment of those over 58 will be accompanied by a difficult administrative recruitment procedure and increased labor inspection.
It was already known that people have fewer opportunities on the labor market as they get older, but that effect was corrected in the study, Baert explains. This allowed the researchers to explicitly examine the effect of the subsidy. It was stated for each applicant that they were eligible for the subsidy, and there was a clear jump in negative perception at the subsidy moment, between the ages of 57 and 58. “The positive financial stimulus is therefore overcompensated by negative productivity signals,” adds Axana Dalle.
Subsidies are stopped
The findings of the study appear to support the decision of the Flemish government to stop the subsidy on July 1, 2024. “We have recommended, together with the Flemish recovery committee, that the Flemish government should scrutinize subsidies such as these,” Baert adds. “After all, they come with an important ‘deadweight loss’: approximately the same people are recruited as would be without the subsidies. So in a sense they are ‘dead weight’ for the budget, an expenditure without any real wealth creation. Our research shows the superlative: the subsidy seems to be more detrimental than helpful.”
The researchers therefore recommend investing the released resources “in labor market programs that effectively help older people to remain in the labor market longer and that, for example, focus more on training and guidance.”