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The effectiveness of targeted wage subsidies for hard-to-place workers

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Author Info

  • Ursula Jaenichen
  • Gesine Stephan

Abstract

Targeted wage subsidies paid to employers are an important element of active labour market policies in Germany. This article uses propensity score matching to investigate their effect on the employment and unemployment rates of subsidized hard-to-place workers. In a first scenario, we estimate the average treatment effect of a subsidy on previously unemployed individuals. A second scenario analyses the effects of a subsidy on employment probabilities conditional on taking-up employment. The third scenario investigates the additional effect of a subsidy on individuals, who have participated in a short-term training measure beforehand. Summing up and in line with the literature, the results show that subsidies have a favourable effect on the employment prospects of participants.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 43 (2011)
Issue (Month): 10 ()
Pages: 1209-1225

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Handle: RePEc:taf:applec:v:43:y:2011:i:10:p:1209-1225

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Cited by:
  1. Michael Lechner & Benjamin Schünemann & Conny Wunsch, 2013. "Do Long-term Unemployed Workers Benefit from Targeted Wage Subsidies?," Working papers 2013/14, Faculty of Business and Economics - University of Basel.
  2. Bernhard, Sarah & Gartner, Hermann & Stephan, Gesine, 2008. "Wage Subsidies for Needy Job-Seekers and Their Effect on Individual Labour Market Outcomes after the German Reforms," IZA Discussion Papers 3772, Institute for the Study of Labor (IZA).
  3. Bijie Ren, 2008. "The regional effects of marginal wage subsidies," Psychometrika, Springer, vol. 3(4), pages 598-626, December.
  4. Brück-Klingberg, Andrea & Burkert, Carola & Garloff, Alfred & Seibert, Holger & Wapler, Rüdiger, 2011. "Does higher education help immigrants find a job? : A survival analysis," IAB Discussion Paper 201106, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  5. Bernhard, Sarah & Hohmeyer, Katrin & Jozwiak, Eva & Koch, Susanne & Kruppe, Thomas & Stephan, Gesine & Wolff, Joachim, 2008. "Aktive Arbeitsmarktpolitik in Deutschland und ihre Wirkungen," IAB-Forschungsbericht 200802, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  6. Gesine Stephan, 2008. "The Effects of Active Labor Market Programs in Germany: An Investigation Using Different Definitions of Non-Treatment," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 228(5+6), pages 586-611, December.
  7. Stephan, Gesine & Zickert, Kathi, 2008. "Participation of unemployment benefit recipients in active labor market programs : before and after the German labor market reforms," IAB Discussion Paper 200815, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  8. Heyer, Gerd & Koch, Susanne & Stephan, Gesine & Wolff, Joachim, 2011. "Evaluation der aktiven Arbeitsmarktpolitik: Ein Sachstandsbericht für die Instrumentenreform 2011 (Evaluation of active labor market programs : a summary of recent results for the German program refo," IAB Discussion Paper 201117, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  9. Bräuninger, Michael & Michaelis, Jochen & Sode, Madlen, 2013. "10 Jahre Hartz-Reformen," HWWI Policy Papers 73, Hamburg Institute of International Economics (HWWI).
    • Michael Bräuninger & Jochen Michaelis & Madlen Sode, 2013. "10 Jahre Hartz-Reformen," MAGKS Papers on Economics 201318, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  10. Caliendo, Marco, 2009. "Income support systems, labor market policies and labor supply: the German experience," Working Paper Series 2009:26, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  11. Gerd Heyer & Susanne Koch & Gesine Stephan & Joachim Wolff, 2012. "Evaluation der aktiven Arbeitsmarktpolitik: Ein Sachstandsbericht für die Instrumentenreform 2011," Journal of Labour Market Research, Springer, vol. 45(1), pages 41-62, March.
  12. Kelly, Elish & McGuinness, Seamus & O'Connell, Philip J., 2011. "What Can Active Labour Market Policies Do?," Papers EC1, Economic and Social Research Institute (ESRI).
  13. Dengler, Katharina & Hohmeyer, Katrin, 2010. "Maßnahmesequenzen im SGB II : eine deskriptive Analyse (Measure sequences in Book II of the Social Code)," IAB-Forschungsbericht 201008, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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