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Factor subsidies, employment generation, and cost per job: a partial equilibrium approach

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  • J K Swales

Abstract

Factor subsidies in a perfectly competitive setting are analysed. A very general model is used to derive expressions for the effect of a factor subsidy on the price and quantity of output and the two factor inputs. These expressions are differentiated to generate qualitative results for the impact of changes in the product-demand, production-function, and factor-supply parameters on the subsidy effects. A similar procedure is used to investigate the exchequer cost per job of general labour and capital subsidies in an industry with Cobb - Douglas technology. The analysis is relieved with illustrative simulations in which 'representative' parameter values are used,

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Bibliographic Info

Article provided by Pion Ltd, London in its journal Environment and Planning A.

Volume (Year): 25 (1993)
Issue (Month): 3 (March)
Pages: 317-338

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Handle: RePEc:pio:envira:v:25:y:1993:i:3:p:317-338

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Web page: http://www.pion.co.uk

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Cited by:
  1. Arie Bregman & Melvyn Fuss & Haim Regev, 1998. "The Effects of Capital Subsidization on Israeli Industry," Working Papers fuss-98-01, University of Toronto, Department of Economics.
  2. Arie Bregman & Melvyn Fuss & Haim Regev, 1998. "The Effects of Capital Subsidization on Israeli Industry," NBER Working Papers 6788, National Bureau of Economic Research, Inc.

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