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The Displacement Effect of Labour-Market Programs: Estimates from the MONASH Model

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Author Info
Peter B. Dixon
Maureen T. Rimmer

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Abstract

A key question concerning labour-market programs is the extent to which they generate jobs for their target group at the expense of others. This effect is measured by displacement percentages. We describe a version of the MONASH model designed to quantify the effects of labour-market programs. Our simulation results suggests that: (1) labour-market programs can generate significant long-run increases in employment; (2) displacement percentages depend on how a labour-market program affects the income trade-off faced by target and non-target groups between work and non-work; and (3) displacement percentages are larger in the short run than in the long run.

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File URL: http://www.monash.edu.au/policy/ftp/workpapr/g-154.pdf
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Publisher Info
Paper provided by Monash University, Centre of Policy Studies/IMPACT Centre in its series Centre of Policy Studies/IMPACT Centre Working Papers with number g-154.

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Date of creation: Jul 2005
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Handle: RePEc:cop:wpaper:g-154

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Related research
Keywords: labour-market programs; displacement percentage; CGE modelling;

Find related papers by JEL classification:
C68 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Computable General Equilibrium Models
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs

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References listed on IDEAS
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  1. Timothy J. Bartik, 1999. "Displacement and Wage Effects of Welfare Reform," Staff Working Papers 99-A, W.E. Upjohn Institute for Employment Research. [Downloadable!] (restricted)
    Other versions:
  2. Richard Blundell & Monica Costa Dias & Costas Meghir & John Van Reenen, 2004. "Evaluating the Employment Impact of a Mandatory Job Search Program," Journal of the European Economic Association, MIT Press, vol. 2(4), pages 569-606, 06. [Downloadable!] (restricted)
    Other versions:
  3. Timothy J. Bartik, 2002. "Spillover Effects of Welfare Reforms in State Labor Markets," Journal of Regional Science, Blackwell Publishing, vol. 42(4), pages 667-701. [Downloadable!] (restricted)
  4. Piggott, John & Chapman, Bruce, 1995. "Costing the Job Compact," The Economic Record, The Economic Society of Australia, vol. 71(215), pages 313-28, December.
  5. Guyonne Kalb, 1998. "An Australian Model for Labour Supply and Welfare Participation in Two-Adult Households," Discussion Papers 0082, University of New South Wales, Social Policy Research Centre. [Downloadable!]
  6. Boeters, Stefan & Böhringer, Christoph & Feil, Michael, 2002. "Taxation and unemployment : an applied general equilibrium approach for Germany," ZEW Discussion Papers 02-39, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  7. Peter B. Dixon & Maureen T. Rimmer, 2003. "A New Specification of Labour Supply in the MONASH Model with an Illustrative Application," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 36(1), pages 22-40. [Downloadable!] (restricted)
  8. John Creedy & Guyonne Kalb & Hsein Kew, 2001. "The Melbourne Institute Tax and Transfer Simulator (MITTS)," Melbourne Institute Working Paper Series wp2001n16, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
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