This article evaluates the effectiveness of hiring subsidies targeted to people with disabilities.By exploiting the timing of implementation among the different Spanish regions of asubsidy scheme implemented in Spain during the period 1990-2014, we employ a differencesin-differences approach to estimate the impact of the scheme on the probability of DI beneficiariesof transiting to employment and on the propensity of individuals of entering theDI program. Our results show that the introduction of the subsidy scheme is in generalineffective at incentivizing transitions to employment, and in some cases it is associatedwith an increased propensity of transiting to DI. Furthermore, we show that an employmentprotection component incorporated to the subsidy scheme, consisting in the obligationfor the employer to maintain the subsidized worker in employment, is associated with lesstransitions to permanent employment, more transitions to temporary employment and moretransitions to DI, suggesting that these type of employment protection measures can haveundesired effects for people with disabilities.