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Subsidies for substitutes? : New evidence on deadweight loss and substitution effects of a wage subsidy for hard-to-place job-seekers

  • Moczall, Andreas

    ()

    (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

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    "This paper estimates substitution effects of the German active labour market programme 'JobPerspektive'', a wage subsidy for hard-to-place welfare recipients. Using a novel panel of the entire population of German establishments with full information on unsubsidized and subsidized employment, counterfactual employment levels of subsidized employers are modelled by way of matching on the propensity score of receiving the subsidy. Using the same method, the substitution of particular groups of workers, including those subsidized by other programme types, is investigated as well. Results provide little evidence for widespread substitution of regular workers due to receiving this particular subsidy; in fact, regular employment is somewhat increased in West Germany as a result of subsidization. Furthermore, JobPerspektive is being used by employers in lieu of wage-paying work opportunities, and receiving JobPerspektive causes establishments to employ more workers with regular hiring subsidies." (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 201305.

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    Length: 38 pages
    Date of creation: 16 May 2013
    Date of revision:
    Handle: RePEc:iab:iabdpa:201305
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    1. Welters, Riccardo & Muysken, Joan, 2008. "Inferring Employer Search Behaviour from Wage Subsidy Participation," Labour Economics, Elsevier, vol. 15(5), pages 844-858, October.
    2. Riccardo Welters & Joan Muysken, 2006. "Employer search and employment subsidies," Applied Economics, Taylor & Francis Journals, vol. 38(12), pages 1435-1448.
    3. Martin Biewen & Bernd Fitzenberger & Aderonke Osikominu & Marie Paul, 2012. "The effectiveness of public sponsored training revisited: The importance of data and methodological choices," ECON - Working Papers 091, Department of Economics - University of Zurich.
    4. repec:iab:iabzaf:v:40:i:1:p:45-64 is not listed on IDEAS
    5. Guido M. Imbens & Jeffrey M. Wooldridge, 2008. "Recent Developments in the Econometrics of Program Evaluation," NBER Working Papers 14251, National Bureau of Economic Research, Inc.
    6. Burgess, Simon & Lane, Julia & Stevens, David, 2000. "Job Flows, Worker Flows, and Churning," Journal of Labor Economics, University of Chicago Press, vol. 18(3), pages 473-502, July.
    7. Marco Caliendo & Sabine Kopeinig, 2008. "Some Practical Guidance For The Implementation Of Propensity Score Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 31-72, 02.
    8. Aki Kangasharju, 2005. "Do Wages Subsidies Increase Employment in Subsidised Firms?," Discussion Papers 378, Government Institute for Economic Research Finland (VATT).
    9. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173, March.
    10. Lechner, Michael, 1999. "Earnings and Employment Effects of Continuous Off-the-Job Training in East Germany after Unification," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(1), pages 74-90, January.
    11. Winterhager, Henrik & Heinze, Anja & Spermann, Alexander, 2006. "Deregulating Job Placement in Europe: A Microeconometric Evaluation of an Innovative Voucher Scheme in Germany," ZEW Discussion Papers 06-11, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    12. Kopf, Eva, 2009. "Short-term training variety for welfare recipients: the effects of different training types," IAB Discussion Paper 200917, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    13. Orszag, J. Michael & Snower, Dennis J., 2003. "Designing employment subsidies," Labour Economics, Elsevier, vol. 10(5), pages 557-572, October.
    14. Kettner, Anja & Rebien, Martina, 2007. "Soziale Arbeitsgelegenheiten : Einsatz und Wirkungsweise aus betrieblicher und arbeitsmarktpolitischer Perspektive," IAB-Forschungsbericht 200702, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    15. Michael Lechner & Conny Wunsch, 2009. "Active labour market policy in East Germany," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 17(4), pages 661-702, October.
    16. Jaakko Pehkonen, 1997. "Displacement Effects of Active Labour Market Policy: The Youth Labour Market in Finland," Empirica, Springer, vol. 24(3), pages 195-208, October.
    17. Jacobi, Lena & Kluve, Jochen, 2007. "Before and after the Hartz reforms: The performance of active labour market policy in Germany," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 40(1), pages 45-64.
    18. Gary Burtless, 1985. "Are targeted wage subsidies harmful? Evidence from a wage voucher experiment," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 39(1), pages 105-114, October.
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