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Targeting Tax Relief at Youth Employment

Author

Listed:
  • Webb, Matthew D.

    () (Carleton University)

  • Warman, Casey

    () (Dalhousie University)

  • Sweetman, Arthur

    () (McMaster University)

Abstract

Canada's Youth Hires program was a targeted employment subsidy that rebated employment insurance premiums to employers with net increases in insurable earnings for youth aged 18-24. Using a difference-in-differences approach, in each of two datasets statistically and economically significant employment impacts are observed. Most of the evidence suggests that the 2-2.4 weeks of increased employment resulted from an aggregate reduction in those not in the labour force, with at most a modest change in the unemployment rate. Many estimated effects are larger for males than females. Notably, strong evidence of displacement (substitution away from slightly older non-subsidized workers) is not observed. However, there may be a small reduction in full-time schooling for the targeted group.

Suggested Citation

  • Webb, Matthew D. & Warman, Casey & Sweetman, Arthur, 2016. "Targeting Tax Relief at Youth Employment," IZA Discussion Papers 10182, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp10182
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    References listed on IDEAS

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    More about this item

    Keywords

    youth unemployment; displacement; unemployment insurance; unemployment; targeted tax policy;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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