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Does a job guarantee pay off? The fiscal costs of fighting long-term unemployment in Austria

Author

Listed:
  • Simon Theurl

    (Chamber of Labour, Vienna, Austria)

  • Dennis Tamesberger

    (Chamber of Labour, Linz, Austria)

Abstract

The idea of a job guarantee (JG) to tackle unemployment has become popular again over recent years. Critics often point to the fiscal costs and the macroeconomic impact of a government financing full employment. In this paper, we analyse the fiscal costs of a JG for long-term unemployed people over the age of 45 in Austria. We show that a JG pays off in the long run. Even if the amount of jobs to be provided increases in times of a recession, or if a government starts with a certain amount of jobs and increases it afterwards, the JG would pay for itself.

Suggested Citation

  • Simon Theurl & Dennis Tamesberger, 2021. "Does a job guarantee pay off? The fiscal costs of fighting long-term unemployment in Austria," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 18(3), pages 364–378-3, December.
    • Handle: RePEc:elg:ejeepi:v:18:y:2021:i:3:p364-378
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    Citations

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    Cited by:

    1. Simone d’alessandro & Tiziano Distefano & Guilherme Spinato Morlin & Davide Villani, 2023. "Policy Responses to Labour-Saving Technologies: Basic Income, Job Guarantee, and Working Time Reduction," JRC Working Papers on Social Classes in the Digital Age 2023-09, Joint Research Centre.

    More about this item

    Keywords

    job guarantee; employer of last resort; long-term unemployment; unemployment; fullemployment; budget; finance; Austria;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

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