Do Earnings Subsidies Affect Job Choice?
It is widely acknowledged that tax and transfer policies can affect employment. This paper explores a different potential impact of transfer policy by asking whether subsidies also affect job duration and wage growth. We provide an analytical framework that identifies causal links between earnings subsidies, job turnover, and wage growth. This framework highlights the importance of the form of the subsidy on the decision about the type of job to accept and, hence, its potential effect on within-job wage growth. The subsidy is predicted to increase job turnover and to affect between-job wage growth by affecting reservation wages. We use this framework to analyze the effects of the Canadian Self-Sufficiency Project (SSP). Consistent with the predictions of the analytical framework, we find that experimentals have shorter job duration and experience faster wage growth than the controls, who continue to be eligible only for Income Assistance.
|Date of creation:||Sep 2004|
|Date of revision:|
|Publication status:||published as 'Do earnings subsidies affect job choice? The impact of SSP subsidies on job turnover and wage growth' in: Canadian Journal of Economics / Revue canadienne d'économique, 2009, 42 (4), 1276 - 1304|
|Contact details of provider:|| Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany|
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
|Order Information:|| Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Connolly, Helen & Gottschalk, Peter T., 2006.
"Differences in Wage Growth by Education Level: Do Less-Educated Workers Gain Less from Work Experience?,"
IZA Discussion Papers
2331, Institute for the Study of Labor (IZA).
- Helen Connolly & Peter Gottschalk, 2000. "Differences in Wage Growth by Education Level: Do Less Educated Workers Gain Less from Work Experience?," Boston College Working Papers in Economics 473, Boston College Department of Economics, revised 26 Aug 2006.
- Joseph G. Altonji & Nicolas Williams, 2005.
"Do Wages Rise with Job Seniority? A Reassessment,"
Cornell University, ILR School, vol. 58(3), pages 370-397, April.
- James Heckman & Lance Lochner & Ricardo Cossa, 2002. "Learning-By-Doing Vs. On-the-Job Training: Using Variation Induced by the EITC to Distinguish Between Models of Skill Formation," NBER Working Papers 9083, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp1322. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak)
If references are entirely missing, you can add them using this form.