The Impact of Subsidies on Czech Firms

Abstract

In the Czech Republic there has been invested a lot of money to the human capital through the European Social Fund. The Human Resources and Employment Operational Programme plays an important role by providing subsidies for the training of employees and an introduction of modern forms of management and human resource development. This paper summarizes the application of the regression discontinuity method to test whether there is an impact of EU assistance on employment in supported firms in 2009. The estimations were conducted with a sample with 1 176 supported and 87 rejected applicants. The estimation results suggest that the impacts of the intervention on employment is positive and statistically significant. The employment change in supported firms was on average about 10–15 p.p. higher than in unsupported firms.

Keywords

• Counterfactual impact evaluation
• regression discontinuity design
• European Social Fund
• employment