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Do Wage Subsidies Provide a Stepping-Stone to Employment for Recent College Graduates? Evidence from a Randomized Experiment in Jordan

Author

Listed:
  • Matthew Groh

    (World Bank)

  • Nandini Krishnan

    (World Bank)

  • David McKenzie

    (World Bank, BREAD, CEPR, and IZA)

  • Tara Vishwanath

    (World Bank)

Abstract

This study examines the impact of a randomized experiment in Jordan in which female community college graduates were assigned to receive a wage subsidy voucher. The wage voucher led to a 38 percentage point increase in employment in the short run, but the average effect is much smaller and no longer statistically significant after the voucher period has expired. The extra job experience gained as a result of the wage subsidy does not provide a stepping-stone to new jobs for these recent graduates, which appears to be due to productivity levels not rising above a binding minimum wage.

Suggested Citation

  • Matthew Groh & Nandini Krishnan & David McKenzie & Tara Vishwanath, 2016. "Do Wage Subsidies Provide a Stepping-Stone to Employment for Recent College Graduates? Evidence from a Randomized Experiment in Jordan," The Review of Economics and Statistics, MIT Press, vol. 98(3), pages 488-502, July.
    • Handle: RePEc:tpr:restat:v:98:y:2016:i:3:p:488-502
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    File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/REST_a_00584
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    More about this item

    Keywords

    Wage Subsidy; Youth Unemployment; Randomized Experiment;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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