# **Design considerations**

Incentive schemes involving direct transfer of funds should consider:

- **Using subsidies to offset upfront costs that inhibit firms, investors, or entrepreneurs from promoting gender equality.** Subsidies tend to be less effective in situations where failure to promote gender equality is not primarily due to immediate financial constraints.

- **Ensuring that grants or subsidies for female entrepreneurs or for hiring women are sufficiently large to offset financial and other barriers.** Studies in West Africa show profit impact for female entrepreneurs from large grants (equivalent to six years of sales), but limited effect from small grants.<sup>21</sup> Results from a program in Italy to support hiring women on permanent contracts found that the subsidies were insufficient to stimulate hiring of new fixed‐term workers—possibly because the incentive structure was not strong enough to counterbalance the risk for employers.<sup>22</sup>

- **Using in‐kind grants to target female‐owned businesses in low‐income contexts, particularly in situations where women’s business resources are at risk of being diverted** to other uses.

- **Complementing hiring subsidies with training and other support for unemployed or underemployed women** . Evidence from European hiring subsidy programs suggests that the impact of hiring subsidies is enhanced by implementing complementary measures to support female job‐seekers, such as help in searching for open positions and preparing for job interviews<sup>23</sup> (government provision of information and facilitation services, as described in Section 4.2.3, can support this effort).

- **Setting up time‐limited programs** . Direct transfer incentives should be linked to a specific project or investment, or a specific goal (e.g. reaching a certain percentage of female leaders), and should not be used indefinitely to subsidize firms or entrepreneurs.

- **Designing for maximum transparency.** Direct transfer schemes should be transparent, both to recipients as well as to those providing the funds (usually taxpayers). The criteria and conditions for receiving funds should be readily available and transparent.

# **Country Example 1. Jordan: Wage subsidy vouchers for female graduates give women more confidence to approach employers, but the long‐term impact is less clear**<sup>24 25</sup>

**Program:** The Jordan New Opportunities for Women (Jordan NOW) program was launched as a pilot program to evaluate the effectiveness of short‐term wage subsidies and employability skills training for female graduates. Such efforts are important in a country where only 17 percent of 20‐ to 45‐year old women work (compared to 77 percent of similarly aged men). Although 93 percent of female graduates want to work after graduation, female graduates often lack professional networks and employers lack experience with female workers.

> 21 Campos and Gassier, “Gender and Entrepreneurship in Sub‐Saharan Africa.”

> 22 Giuseppe Ciccarone, “Stimulating Job Demand: The Design of Effective Hiring Subsidies in Europe,” EEPO Review (European Employment Policy Observatory, March 2014).

> 23 Ciccarone.

> 24 Matthew Groh, “Soft Skills or Hard Cash? The Impact of Training and Wage Subsidy Programs on Female Youth Employment in Jordan,” Impact Evaluation Series (World Bank, 2012), http://documents.worldbank.org/curated/en/654491468271825136/Soft‐skills‐or‐hard‐cash‐the‐impact‐of‐training‐and‐wage‐ subsidy‐programs‐on‐female‐youth‐employment‐in‐Jordan.

> 25 “Gender Equality and Development.”

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