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Can Temporary Wage Incentives Increase Formal Employment ? Experimental Evidence from Mexico (English)

Formal sector entry-level jobs in Mexico offer low starting salaries but substantial wage growth. This paper experimentally tests whether a six-months wage incentive can increase formal employment among secondary school graduates. Combining survey and high-frequency social security data, the paper shows that the incentive increases formal employment among vocational school graduates by 4.2 percentage points (14.5 percent) over the first two years...
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Abel,Martin; Carranza,Eliana; Geronimo,Kimberly Jean; Ortega Hesles,Maria Elena.

Can Temporary Wage Incentives Increase Formal Employment ? Experimental Evidence from Mexico (English). Policy Research working paper ; no. WPS 10234 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/099638511172227750

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