Who cleans my house if the government pays? Refugees, low-educated workers, and long-term unemployed in tax-subsidized domestic service firms
Many European countries have implemented policies to revive their domestic service sectors. A common goal of these reforms has been to create employment for disadvantaged groups on the domestic labor market. I evaluate a Swedish policy where domestic service firms receive a 50% tax deduction on labo...
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oai:doaj.org-article:347d5abc8aae4d45bc6acb27cbec45472021-12-05T14:11:08ZWho cleans my house if the government pays? Refugees, low-educated workers, and long-term unemployed in tax-subsidized domestic service firms2193-900410.2478/izajolp-2021-0001https://doaj.org/article/347d5abc8aae4d45bc6acb27cbec45472021-05-01T00:00:00Zhttps://doi.org/10.2478/izajolp-2021-0001https://doaj.org/toc/2193-9004Many European countries have implemented policies to revive their domestic service sectors. A common goal of these reforms has been to create employment for disadvantaged groups on the domestic labor market. I evaluate a Swedish policy where domestic service firms receive a 50% tax deduction on labor costs. Detailed data from tax records identify all formal workers and owners of firms that receive deductions. I describe the composition of workers and owners in these firms with respect to three groups targeted by Swedish policymakers: refugees, people with low education, and people who enter the workforce from long-term unemployment. I find that the shares of refugees and long-term unemployed in the subsidized sector barely exceed the shares in the full private labor force, and fall far below the shares in industrial sectors with a predominance of elementary jobs. The share of people with low education is higher than in the full private sector and on par with other low-skilled sectors. I conclude that the tax subsidy largely failed to improve employment opportunities among the target groups. An extended analysis suggests that labor immigration from other EU countries may be a partial explanation for this. EU immigrants operate half of all subsidized firms in Sweden's largest cities and nearly exclusively employ other EU immigrants.Rickne JohannaSciendoarticledomestic servicestax deductionemploymentrefugee immigrantsh2j21j23j61Labor policy. Labor and the stateHD7795-8027ENIZA Journal of Labor Policy, Vol 11, Iss 1, Pp 161-181 (2021) |
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domestic services tax deduction employment refugee immigrants h2 j21 j23 j61 Labor policy. Labor and the state HD7795-8027 |
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domestic services tax deduction employment refugee immigrants h2 j21 j23 j61 Labor policy. Labor and the state HD7795-8027 Rickne Johanna Who cleans my house if the government pays? Refugees, low-educated workers, and long-term unemployed in tax-subsidized domestic service firms |
| description |
Many European countries have implemented policies to revive their domestic service sectors. A common goal of these reforms has been to create employment for disadvantaged groups on the domestic labor market. I evaluate a Swedish policy where domestic service firms receive a 50% tax deduction on labor costs. Detailed data from tax records identify all formal workers and owners of firms that receive deductions. I describe the composition of workers and owners in these firms with respect to three groups targeted by Swedish policymakers: refugees, people with low education, and people who enter the workforce from long-term unemployment. I find that the shares of refugees and long-term unemployed in the subsidized sector barely exceed the shares in the full private labor force, and fall far below the shares in industrial sectors with a predominance of elementary jobs. The share of people with low education is higher than in the full private sector and on par with other low-skilled sectors. I conclude that the tax subsidy largely failed to improve employment opportunities among the target groups. An extended analysis suggests that labor immigration from other EU countries may be a partial explanation for this. EU immigrants operate half of all subsidized firms in Sweden's largest cities and nearly exclusively employ other EU immigrants. |
| format |
article |
| author |
Rickne Johanna |
| author_facet |
Rickne Johanna |
| author_sort |
Rickne Johanna |
| title |
Who cleans my house if the government pays? Refugees, low-educated workers, and long-term unemployed in tax-subsidized domestic service firms |
| title_short |
Who cleans my house if the government pays? Refugees, low-educated workers, and long-term unemployed in tax-subsidized domestic service firms |
| title_full |
Who cleans my house if the government pays? Refugees, low-educated workers, and long-term unemployed in tax-subsidized domestic service firms |
| title_fullStr |
Who cleans my house if the government pays? Refugees, low-educated workers, and long-term unemployed in tax-subsidized domestic service firms |
| title_full_unstemmed |
Who cleans my house if the government pays? Refugees, low-educated workers, and long-term unemployed in tax-subsidized domestic service firms |
| title_sort |
who cleans my house if the government pays? refugees, low-educated workers, and long-term unemployed in tax-subsidized domestic service firms |
| publisher |
Sciendo |
| publishDate |
2021 |
| url |
https://doaj.org/article/347d5abc8aae4d45bc6acb27cbec4547 |
| work_keys_str_mv |
AT ricknejohanna whocleansmyhouseifthegovernmentpaysrefugeesloweducatedworkersandlongtermunemployedintaxsubsidizeddomesticservicefirms |
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