Jorge Rodríguez, academic and researcher at the Human Development Lab and the Faculty of Economics and Business at the Universidad de los Andes, has been awarded a Fondecyt Regular grant for a project analyzing the impact of employment subsidies on female labor market participation in Chile.
The study focuses on the Bono al Trabajo de la Mujer (BTM), a program in place since 2012 that supplements the wages of working women aged 25 to 59 from the lowest-income households, as defined by the Registro Social de Hogares.
“The research studies how employment subsidies affect female labor market participation and the mechanisms that explain these effects. In particular, I analyze the Bono al Trabajo de la Mujer, a program that seeks to support working women while also encouraging labor market insertion,” Rodríguez explains.
In its first stage, the project evaluates the impact of eligibility for the BTM on employment and labor income by comparing women just above and below the eligibility threshold. The results show that eligibility for the benefit does not generate statistically significant effects on either outcome.
Building on these findings, the study advances to a second stage aimed at understanding why the subsidy does not produce the expected effects. “We consider two main mechanisms: that the amount of the subsidy may be insufficient to alter labor supply decisions, and the existence of information failures regarding the program,” Rodríguez notes. To explore these hypotheses, the team is implementing a nationwide survey on awareness of the BTM and barriers to access.
“On the one hand, I am interested in studying social policies that combine income support with work incentives. The Bono al Trabajo de la Mujer is a good example of this, as it aims to promote autonomy and labor market participation, unlike more assistance-based programs,” Rodríguez explains. “While these structural and cultural factors change slowly, an employment subsidy can be an effective short-term tool to reduce the gap, even if it is not a definitive solution,” he adds.
“I hope this research helps to better understand why this type of policy may or may not be effective. In the Chilean context, I trust that our results will provide useful evidence for the discussion surrounding the new bill that creates the Unified Employment Subsidy,” Rodríguez concludes.
The project is developed in collaboration with Tomás Rau from the Pontificia Universidad Católica de Chile and Antonia Aguilera from the Dirección de Presupuestos.
