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Inferring Employer Search Behaviour from Wage Subsidy Participation

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  • Welters, Riccardo
  • Muysken, Joan

Abstract

We introduce a novel way to infer employer search behaviour, through deadweight loss incidence in wage subsidy schemes. Using a data set on British firms participating in such schemes we can distinguish between intensive and extensive employer search. These data also allow us to separate the negative economies of scale effect from the positive monitoring effect of firm size on intensive search costs. Our findings further indicate that 'hours worked' and 'supervisory tasks' increase extensive search costs. Since intensive and extensive search behaviour affect the job find probability of the (long-term) unemployed, our conclusions have significant labour market policy relevance.

Suggested Citation

  • Welters, Riccardo & Muysken, Joan, 2008. "Inferring Employer Search Behaviour from Wage Subsidy Participation," Labour Economics, Elsevier, vol. 15(5), pages 844-858, October.
  • Handle: RePEc:eee:labeco:v:15:y:2008:i:5:p:844-858
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    References listed on IDEAS

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    Cited by:

    1. Moczall, Andreas, 2013. "Subsidies for substitutes? : New evidence on deadweight loss and substitution effects of a wage subsidy for hard-to-place job-seekers," IAB Discussion Paper 201305, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. Moczall, Andreas, 2015. "The effect of hiring subsidies on regular wages," IAB Discussion Paper 201501, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Moczall, Andreas, 2015. "The effect of hiring subsidies on regular wages," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113225, Verein für Socialpolitik / German Economic Association.

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