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

Author

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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))

Suggested Citation

  • Krug, Gerhard & Dietz, Martin & Ullrich, Britta, 2008. "The impact of firm characteristics on the success of employment subsidies : a decomposition analysis of treatment effects," IAB Discussion Paper 200818, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  • Handle: RePEc:iab:iabdpa:200818
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    References listed on IDEAS

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    1. Bender, Stefan & Koch, Susanne & Meßmann, Susanne & Walwei, Ulrich, 2007. "Was muten sich Arbeitslose zu? : Lohnkonzessionen von ALG-II-Empfängern," IAB Discussion Paper 200723, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. 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.
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    Cited by:

    1. Joachim Wolff & Gesine Stephan, 2013. "Subsidized work before and after the German Hartz reforms: design of major schemes, evaluation results and lessons learnt," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-24, December.

    More about this item

    Keywords

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

    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; Discrete Regressors; Proportions; Probabilities
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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