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The impact of firm characteristics on the success of employment subsidies : a decomposition analysis of treatment effects

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Author Info
Krug, Gerhard () (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
Dietz, Martin () (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
Ullrich, Britta (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
Abstract

"In this paper we show that firm characteristics have an influence on the success of employment subsidies e.g. wage subsidies and in-work benefits, as they can strengthen positive effects or mitigate negative effects. We consider firm characteristics as post treatment variables, which are realised after the (placement officer's or the unemployed job seeker's) decision regarding programme participation has taken place. Therefore in a first step we estimate pairwise treatment effects by propensity score matching, controlling for pre-treatment characteristics of the treated and control individuals only. In a second step as a methodological contribution we propose a decomposition of the pairwise treatment effects using an Oaxaca/Blinder style decomposition analysis on the matched samples. In this decomposition we include the post-treatment firm characteristics as explanatory variables. Because employment status is a binary outcome variable in our empirical application, we use a generalisation of the decomposition analysis to nonlinear regressions developed by Fairlie (2005). This procedure allows us to distinguish between the part of a treatment effect that is due to differences in firm characteristics between treated and controls (the 'explained' part) and the part that is independent of those differences (the 'unexplained' part)." (author's abstract, IAB-Doku) ((en))

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Paper provided by Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany] in its series IAB Discussion Paper with number 200818.

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Length: 31 pages
Date of creation: 15 Apr 2008
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Handle: RePEc:iab:iabdpa:200818

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Keywords: Eingliederungszuschuss - Erfolgskontrolle; Lohnsubvention; Unternehmen; Beschäftigungsförderung; Arbeitslose; berufliche Reintegration; Beschäftigungsdauer; Sozialhilfeempfänger; Integrierte Erwerbsbiografien; Beschäftigungseffekte - Determinanten; Unternehmensgröße; Lohnhöhe; Beschäftigtenstruktur; Qualifikationsstruktur; Wirtschaftszweige;

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Find related papers by JEL classification:
J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models
C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods

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    Other versions:
  2. Ronald Oaxaca, . "Male-Female Wage Differentials in Urban Labor Markets," Working Papers 396, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
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  3. Lechner, Michael & Wunsch, Conny, 2006. "Are Training Programs More Effective When Unemployment Is High?," CEPR Discussion Papers 5920, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
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  8. A. Smith, Jeffrey & E. Todd, Petra, 2005. "Does matching overcome LaLonde's critique of nonexperimental estimators?," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 305-353. [Downloadable!] (restricted)
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  9. Blundell, Richard, 2000. "Work Incentives and 'In-Work' Benefit Reforms: A Review," Oxford Review of Economic Policy, Oxford University Press, vol. 16(1), pages 27-44, Spring.
  10. 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]. [Downloadable!]
  11. Miquel, Ruth & Lechner, Michael & Wunsch, Conny, 2005. "Long-Run Effects of Public Sector Sponsored Training in West Germany," ZEW Discussion Papers 05-02, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
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  12. Werner Eichhorst, 2006. "Kombilöhne und Mindestlöhne als Instrumente der Beschäftigungspolitik - Erfahrungen und Handlungsoptionen," IZA Discussion Papers 2120, Institute for the Study of Labor (IZA). [Downloadable!]
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