Experimental Design
The primary aim of the experiment is to identify the effect of the hiring subsidy on the likelihood of a non-employer firm becoming an employer. The target population of the experiment includes all non-employer firms in Finland that had no employees within 12 months prior to the experiment and sales between 15 000 and one million euros in 2021, with some exceptions defined by the Act of Parliament on the experiment (e.g., companies that have records of outstanding tax liabilities or negligence in tax return filing in the tax debt register are not in the target population).
The subsidy is offered in two phases. In the first phase, beginning on March 1 2022, 3 500 randomly assigned firms in the target population will be offered the subsidy. They will have time until the end of July 2022 to apply for the subsidy and hire an employee. If less than 900 firms apply for the subsidy in the first phase, the second phase, beginning on August 1 2022, will be initiated. The target population in the second phase excludes first-phase treatment and control groups. The size of the treatment group in the second phase will be determined based on the first-phase take-up rate and pre-second-phase data, targeting a total of 900 subsidy recipients in the first- and second-phase treatment groups together. The second-phase treatment group will have time until the end of December 2022 to apply for the subsidy and hire an employee.