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The Impact of Wage Subsidies on Jobseekers' Outcomes and Firm Employment


  • Sarah Crichton

    () (Labour and Immigration Research Centre, Ministry of Business, Innovation and Employment)

  • Maré, David C

    () (Motu Economic and Public Policy Research)


The study examines the impact of wage subsidies on assisted jobseekers and on the firms that employ them, using propensity matching methods. Overall we find that starting a subsidised job leads to significant employment and earning benefits for assisted jobseekers over several years. Subsidised workers are disproportionately hired into expanding firms, though we cannot determine whether the expansion would have occurred in the absence of the subsidy.

Suggested Citation

  • Sarah Crichton & Maré, David C, 2013. "The Impact of Wage Subsidies on Jobseekers' Outcomes and Firm Employment," Working Papers 13_05, Motu Economic and Public Policy Research.
  • Handle: RePEc:mtu:wpaper:13_05

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    References listed on IDEAS

    1. Marcus Eliason & Donald Storrie, 2006. "Lasting or Latent Scars? Swedish Evidence on the Long-Term Effects of Job Displacement," Journal of Labor Economics, University of Chicago Press, vol. 24(4), pages 831-856, October.
    2. Richard Fabling & David C. Maré, 2012. "Cyclical Labour Market Adjustment in New Zealand: The Response of Firms to the Global Financial Crisis and its Implications for Workers," Working Papers 12_04, Motu Economic and Public Policy Research.
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    Cited by:

    1. Amina Ebrahim & Murray Leibbrandt & Vimal Ranchhod, 2017. "The effects of the Employment Tax Incentive on South African employment," WIDER Working Paper Series 005, World Institute for Development Economic Research (UNU-WIDER).

    More about this item


    wage subsidy; active labour market policies; propensity matching;

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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