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Wages, Employment and Tenure of Temporarily Subsidized Workers: Does the Industry Matter?

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  • Stephan, Gesine

    (Institute for Employment Research (IAB), Nuremberg)

Abstract

This paper explores whether wage, employment and tenure outcomes of workers taking up a job subsidized by the German Federal Employment Agency differ by industry. The analysis utilizes administrative data and statistical matching techniques; it covers an observation period of 3.5 years. First, we conduct a within-industry comparison of temporarily subsidized and otherwise similar unsubsidized workers. The findings show for most industries that subsidized workers had similar short-run wages, but fared significantly better in the longer run. Second, we compare labor market outcomes of subsidized workers within each industry with those of similar subsidized workers in other industries. The main result is that cumulated wages of workers would not have differed significantly, if they had been hired in another industry instead. However, we find significant differences in short-term wages, employment and tenure outcomes across industries. Finally, from a fiscal point of view it seems more advantageous to subsidize workers hired in industries that are less subject to demand fluctuations.

Suggested Citation

  • Stephan, Gesine, 2010. "Wages, Employment and Tenure of Temporarily Subsidized Workers: Does the Industry Matter?," IZA Discussion Papers 5078, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp5078
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    References listed on IDEAS

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    1. Bernhard Boockmann & Susanne Steffes, 2010. "Workers, Firms, or Institutions: What Determines Job Duration for Male Employees in Germany?," ILR Review, Cornell University, ILR School, vol. 64(1), pages 109-127, October.
    2. Christian, GOEBEL, 2006. "The effect of temporary employment subsidies on employment duration," Discussion Papers (ECON - Département des Sciences Economiques) 2006035, Université catholique de Louvain, Département des Sciences Economiques.
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    Cited by:

    1. Heyer, Gerd & Koch, Susanne & Stephan, Gesine & Wolff, Joachim, 2012. "Evaluation der aktiven Arbeitsmarktpolitik: Ein Sachstandsbericht für die Instrumentenreform 2011 (Evaluation of active labor market programs : a summary of recent results for the German program refor," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 45(1), pages 41-62.
    2. Rainer Eppel & Helmut Mahringer, 2013. "Do Wage Subsidies Work in Boosting Economic Inclusion? Evidence on Effect Heterogeneity in Austria," WIFO Working Papers 456, WIFO.
    3. Rainer Eppel & Helmut Mahringer, 2012. "Do wage subsidies work in boosting economic inclusion? Evidence on e," EcoMod2012 4065, EcoMod.
    4. Achatz, Juliane & Trappmann, Mark, 2011. "Arbeitsmarktvermittelte Abgänge aus der Grundsicherung : der Einfluss von personen- und haushaltsgebundenen Barrieren," IAB-Discussion Paper 201102, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    5. Gerd Heyer & Susanne Koch & Gesine Stephan & Joachim Wolff, 2012. "Evaluation der aktiven Arbeitsmarktpolitik: Ein Sachstandsbericht für die Instrumentenreform 2011," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 45(1), pages 41-62, March.
    6. 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.
    7. Lutz Bellmann & Gesine Stephan, 2014. "Which firms use targeted wage subsidies? An empirical note for Germany [Welche Betriebe nutzen Eingliederungszuschüsse in Deutschland?]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 47(1), pages 165-175, March.

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    Keywords

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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy

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