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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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  • 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

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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Bibliographic Info

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
Date of revision:
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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References

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  1. Krug, Gerhard, 2007. "In-work benefits for low wage jobs : can additional income hinder labor market integration?," IAB Discussion Paper 200728, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  2. Bernd FITZENBERGER & Aderonke OSIKOMINU & Robert VÖLTER, 2008. "Get Training or Wait? Long-Run Employment Effects of Training Programs for the Unemployed in West Germany," Annales d'Economie et de Statistique, ENSAE, issue 91-92, pages 321-355.
  3. Pfeifer, Christian, 2007. "Homogene und heterogene Teilnahmeeffekte des Hamburger Kombilohnmodells : ein Verfahrensvergleich von Propensity Score Matching und OLS-Regression," IAB Discussion Paper 200722, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  4. 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].
  5. 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.
  6. Lechner, Michael, 1999. "Identification and Estimation of Causal Effects of Multiple Treatments Under the Conditional Independence Assumption," IZA Discussion Papers 91, Institute for the Study of Labor (IZA).
  7. Michael Lechner & Conny Wunsch, 2009. "Are Training Programs More Effective When Unemployment Is High?," Journal of Labor Economics, University of Chicago Press, vol. 27(4), pages 653-692, October.
  8. Biewen, Martin & Fitzenberger, Bernd & Osikominu, Aderonke & Waller, Marie, 2007. "Which Program for Whom? Evidence on the Comparative Effectiveness of Public Sponsored Training Programs in Germany," ZEW Discussion Papers 07-042, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  9. 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.
  10. Lechner, Michael & Miquel, Ruth & Wunsch, Conny, 2005. "Long run Effects of Public Sector Sponsored Training in West Germany," CEPR Discussion Papers 4851, C.E.P.R. Discussion Papers.
  11. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Wiley Blackwell, vol. 65(2), pages 261-94, April.
  12. Eichhorst, Werner, 2006. "Kombilöhne und Mindestlöhne als Instrumente der Beschäftigungspolitik – Erfahrungen und Handlungsoptionen," IZA Discussion Papers 2120, Institute for the Study of Labor (IZA).
  13. Donna Brown & Steven McIntosh, 2003. "Job satisfaction in the low wage service sector," Applied Economics, Taylor & Francis Journals, vol. 35(10), pages 1241-1254.
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