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Getting the unemployed back to work: the role of targeted wage subsidies

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Listed:
  • Bell, Bell

    (Institute for Fiscal Studies)

  • Richard Blundell

    (Institute for Fiscal Studies and University College London)

  • John Van Reenen

    (Institute for Fiscal Studies)

Abstract

This paper examines alternative approaches to wage subsidy programmes. It does this in the context of a recent active labour market reform for the young unemployed in Britain. This ?ew Deal?reform and the characteristics of the target group are examined in detail. We discuss theoretical considerations, survey the existing empirical evidence and propose two strategies for evaluation. The first suggests an expost ?rend adjusted dihrence in dihrence' estimator. The second, relates to a model based ex-ante evaluation. We present the conditions for each to provide a reliable evaluation and W some of the crucial parameters using data from the British Labour Force Survey. We stress that the success of this type of labour market programmes hinge on dynamic aspects of the youth labour market, in particular the pay-off to experience and training.

Suggested Citation

  • Bell, Bell & Richard Blundell & John Van Reenen, 1999. "Getting the unemployed back to work: the role of targeted wage subsidies," IFS Working Papers W99/12, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:99/12
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    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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