Wage Subsidy Program Research Articles

Impact evaluation of the ‘IDMAJ’ wage subsidy program on employment quality in Morocco

Impact evaluation of the ‘IDMAJ’ wage subsidy program on employment quality in Morocco

One (program) for all or all (programs) for one: Evaluation of the employment program opportunity for all of the federation of Bosnia and Herzegovina

Using administrative data from tax records and public employment services, this paper examines whether the largest wage subsidy program deployed in 2014 in the Federation of Bosnia and Herzegovina, Opportunity for All, was effective at improving employment outcomes. Given the non-experimental design, the paper relies on propensity score matching estimators. It contributes to the literature on impact evaluations of active labor market policies (ALMPs) by exploiting detailed work histories of jobseekers to identify the control group. In the preferred specification, the program was effective in increasing employment among program participants relative to the control by 13 % 12 months after completing the subsidized period. However, the results are highly sensitive to the assumption of the starting date of the job spell in the control group, which carries information about previous work history. When changing the assumptions about the starting date of the subsidized job spell of the control group, the results remain positive in the short run, but turn out to be either larger or even negative for the medium run. In all cases, heterogeneity analysis reveals that the program is most beneficial for jobseekers of about 40 years of age and older, and for low-skilled workers.

Characteristics and features of NEET youth in the context of country analysis

Object: To identify measures to reduce NEET youth based on the study of international experience.Methods: Methods of system, dynamic, structural and correlation analysis.Results: Youth is a special socio-demographic group that has a complex internal structure. Today, the increase in the number of young people not involved in the labor and educational spheres (NEET – Not in Education, Employment, or Training) requires certain measures to minimize this group.Conclusions: Analysis of the obtained material allowed us to conclude that the indicators of NEET youth and youth unemployment have a strong relationship for many countries. Based on the study of the structure of NEET-youth in the context of country analysis, measures to minimize the segment of NEET-youth are determined. Analysis of the world experience in minimizing the NEET youth allowed us to identify the following areas: Wage subsidy programs; public works programs; development of flexible forms of employment; development of youth entrepreneurship; educational programs for young people.

HUMBLE PIE IS COLD COMFORT Comment on M. Sandel’s The Tyranny of Merit

HUMBLE PIE IS COLD COMFORT Comment on M. Sandel’s <i>The Tyranny of Merit</i>

Micro-econometric evaluation of subsidized employment in morocco: the case of the "Idmaj" program

This paper aims to assess the impact of the Moroccan wage subsidy program "Idmaj". It applies the propensity score matching method to the data from a survey conducted by the Ministry of Labour on a sample of eligible individuals. Our results suggest that wage subsidies in Morocco have a positive but marginally significant effect on reducing unemployment and improving employment and a significant negative impact on wages. It also highlights some heterogeneous effects of the program, particularly on women. Finally, it appears that the program did not serve as a stepping stone to higher-paying, high-quality work and, in contrast, it had a stigmatizing effect on beneficiaries.

Effectiveness of the Covid-19 Economic Stimulus Packages: Viewpoints from Malaysian Young Entrepreneurs

The objective of this study is to investigate the effectiveness of economic stimulus packages of COVID-19 for small-medium enterprises (SMEs) in Malaysia, specifically on the young entrepreneurs’ age 40 and below to offer some views on financial measures that should be prioritised and strengthened to lessen the burden of those young entrepreneurs who are severely affected during the pandemic. Data collected mainly from the survey of 25 industry players on their views on the Malaysian government’s stimulus packages, announcements and reports. Analysis of the findings serves as the basis for deriving the viewpoints and reflections of this paper. The result shows that most interviewees welcome a six-month wage subsidy program, bank loan instalment moratorium and company tax deferment. Respondents commented that tax incentives on certain expenses are not as beneficial as that spending is luxurious. Feedback shows a delay in receiving the subsidies by some respondents and concerns on their ability to pay tax and loan instalments in the future when the government lifted the incentives as they expect a longer time is needed to boost demand. From the positive impacts, respondents viewed optimistically the Malaysian government’s stimulus packages and complimented that as one of the best government strategies.

Coronavirus disease and local government

Coronavirus disease and local government

WAGE SUBSIDIES AND THE LABOR SUPPLY OF OLDER PEOPLE: EVIDENCE FROM SINGAPORE’S WORKFARE INCOME SUPPLEMENT SCHEME

An increasing body of literature considers population aging and labor markets, focusing on the dynamics of older workers’ labor market participation. Singapore introduced the Workfare Income Supplement (WIS) scheme in 2007, targeting low-income, older workers. Previous studies show that labor force participation drops significantly after the age of 45. We examine whether a wage subsidy program can increase the labor supply of these older workers. Using Hong Kong as a control group in a difference-in-difference-in-difference approach, we find that this program increased labor force participation for women aged 60–64 by 3.1–5.5% points, but had no statistically significant impact on the labor supply of men.

Wage subsidies targeted to jobseekers with disabilities: subsequent employment and disability retirement

In many countries, a non-negligible percentage of the working-age population has impairments that also entail reduced work capacity, and disability retirement is increasing. Despite this, studies on the effects of policies aimed at enhancing the labour market inclusion among people with disabilities, such as targeted wage subsidies, are surprisingly few. In an attempt to fill this gap, we have studied how wage subsidies affect future labour market outcomes for jobseekers with disabilities, in terms of employment and disability retirement. By using inverse probability weighting applied to rich Swedish register data, we contrast participants in the wage subsidy program to observably similar non-participants during a 19-year period. We find that participation was associated with both positive and negative labour market outcomes. On the negative side, participants were less likely to have unsubsidised employment. On the positive side, leaving the labour market through the disability insurance program was somewhat less common among participants. Moreover, using a broader employment measure including subsidised jobs, the participants were found to be employed to a larger extent, which could be interpreted either as locking-in effects or as fostering labour market inclusion.

Worker-level and firm-level effects of a wage subsidy program for highly educated labor: Evidence from Denmark

We study the effects of a Danish wage subsidy program for highly educated workers on the performance of the persons and firms participating in the program. Using data on the population of program participants, both workers and firms, we find that the program had positive effects on employment and annual earnings during program participation while there are no positive effects for the years after program expiration. At the employer-level, we find statistically significant effects on the number of highly educated employees for both the period of program participation and the subsequent time period. For the total number of employees we only find positive effects during program participation while there are no statistically significant effects for value added, net income, return on assets, wages per employee and labor productivity.

Do wage subsidies for disabled workers reduce their non-employment? - evidence from the Danish Flexjob scheme

Abstract We evaluate the potential of wage subsidy programs for reducing non-employment of the disabled by exploiting a reform of the Danish Flexjob scheme targeted towards employing the long-term (partially) disabled. Firms received a salary reimbursement for all employees granted a Flexjob. We examine whether a change from full to partial reimbursement to governmental units affected the share of Flexjobs allocated to retained (insiders) versus non-employed hirees (outsiders). After the reform, the composition of hires changed substantially in favor of insiders, both in absolute and relative terms. A reduction in subsidies thus leads to a decrease in the hiring of the non-employed disabled. JEL Codes: I38, J14, C21

Do Long-Term Unemployed Workers Benefit from Targeted Wage Subsidies?

AbstractWe evaluate a wage subsidy program that is targeted at long-term unemployed workers in Germany. We use an alternative identification procedure compared to empirical studies conducted so far. Exploiting the particular program regulations and large administrative data we estimate the impact of program availability using a regression discontinuity framework. Our results suggest no significant impact of the availability of the subsidy on labor market outcomes of the target group. Even though our analysis lacks some statistical power, our findings do not support the substantial positive effects obtained from matching studies. As our approach does not require observability of all drivers of selection, previous empirical studies justifying government expenditures on wage subsidies based on matching methods should be reconsidered.

The effects of wage subsidies for older workers

Population aging in many developed countries has motivated some governments to provide wage subsidies to employers for hiring or retaining older workers. The subsidies are intended to compensate for the gap between the pay and productivity of older workers, which may discourage their hiring. A number of empirical studies have investigated how wage subsidies influence employers’ hiring and employment decisions and whether the subsidies are likely to be efficient. To which groups subsidies should be targeted and how the wage subsidy programs interact with incentives for early retirement are open questions.

Worker-Level and Firm-Level Effects of a Wage Subsidy Program for Highly Educated Labor: Evidence from Denmark

We study the effects of a Danish wage subsidy program for highly educated workers on the labor market outcomes of the persons participating in the program and on the performance of the firms that hired these subsidized workers. Using data on the population of program participants, both individuals and firms, we find that the program had positive effects on employment and wages the year individuals participate in the program. For wages, we also find positive and statistically significant effects for the two subsequent years. At the program participating firm level, we find statistically significant effects on the number of highly educated employees for both the period of program participation and the subsequent time period.

Wage Subsidies and the Labor Supply of Older People: Evidence from Singapore's Workfare Income Supplement Scheme

An increasing body of literature considers population aging and labor markets, focusing on the dynamics of older workers’ labor market participation. Singapore introduced the Workfare Income Supplement Scheme in 2007, targeting low-income, older workers. Previous studies show that labor force participation drops significantly after the age of 45. We examine whether a wage subsidy program can increase the labor supply of these older workers. Using Hong Kong as a control group in a difference-in-difference-in-difference approach, we find that this program increased labor force participation for women aged 60 to 64 by 3.1 to 5.5 percentage points.

Dealing with unemployment: What should be the role of labour market programs?

This review presents a summary of evidence on outcomes from active labour market programs. Active labour market programs aim to increase the likelihood of employment for individuals who are unemployed or at risk of unemployment. The focus of this review is on studies of active labour market programs in Australia, supplemented with international evidence. An overview and historical background on active labour market programs is provided, as well as an introduction to the empirical methods used to estimate the effect of the programs. Evidence on the effects of the main types of programs – case management, work experience programs and formal education and training – is reviewed, and the main findings are distilled into a set of lessons for policy makers. The review concludes that active labour market programs cannot by themselves have a major impact on the rate of unemployment, but some spending on these programs is justified by outcomes such as increasing the pool of unemployed who are job ready and sharing the burden of unemployment. Job search and wage subsidy programs are suggested to be good ways to assist unemployed who are less disadvantaged. For unemployed with higher levels of disadvantage, priority should be given to programs that create jobs with opportunities for linked training, and that provide a pathway to a permanent job. Evidence Base, issue 4, 2014

Assessing the impact of a wage subsidy for single parents on social assistance

Abstract This paper studies the impact of a wage subsidy program aimed at long‐term social assistance recipients in Quebec. The program closely mimics the Self‐Sufficiency Project and was implemented for a trial period of one year in 2002.We focus on the labour market transitions of the targeted population starting one year before the implementation of the program and until the end of 2005. Our results show that the duration of spells off social assistance increased, while the duration of social assistance spells decreased slightly. The response to the program varies considerably with both observed and unobserved characteristics.

A Study on Demand-side Wage Subsidy

As the ‘jobless growth’ is developing into a worldwide phenomenon, many countries try to recover a virtuous relationship between the growth and employment using various wage subsidy programs. This study focuses on wage subsidy to employers, labor demand-side wage subsidy for which one can think of two types－a tax credit(a flat wage subsidy) and a social insurance premium exemption(a proportional wage subsidy). For job creation, Korean government reintroduced a tax credit to small and medium-sized enterprises(SMEs) which have increased their employment level in 2010. But many experts has continuously insisted that it should be replaced with a social insurance premium exemption arguing only a few SMEs benefit from the tax credit as most of them are actually not paying any corporate or general income tax bills. However, as the insurance premium exemption accompanies an increase in the amount of budget with the coverage widen, one cannot confirm its cost effectiveness over the tax credit. This paper aims to provide a theoretical analysis to derive some formal conditions under which a social insurance premium exemption creates more jobs than a tax credit does given a budget constraint. We show that the former’s dominance over the latter depends on whether there exists a dead zone of social insurance or not. If there does not exist a dead zone, a social insurance premium exemption is more desirable in many cases, whereas one cannot guarantees its dominance over a tax credit if there exists a dead zone. Therefore in order to realize its dominance, the government should minimize a dead zone so that most SMEs effectively benefit from the insurance premium exemption. In addition, applying discriminative exemption rates which reflect each firm’s job conditions such as wage level and labor demand/supply sensitivity, the government try to enhance job creation effect.

Do Austrian men and women become more equal? At least in terms of labour supply!

We study the development of wage elasticity of labour supply for Austrian men and women over time using comparable and representative survey data for the 1980s and 1990s. The elasticity of men is relatively low and constant over time, similar to the behaviour of single women. Most remarkable is the almost continuous reduction in the labour supply reactions of married women: while their elasticity was still several times larger at the beginning of the 1980s, they approached rapidly the much less elastic behaviour of men. These developments are important for the analysis of deadweight losses of taxation as well as the effects of tax reforms and wage subsidy programs.

Homogene und heterogene Teilnahmeeffekte des Hamburger Kombilohnmodells: Ein Verfahrensvergleich von Propensity Score Matching und linearer Regression

The paper evaluates the treatment effects of the wage subsidy program in Hamburg with propensity score matching as well as linear regressions. It is found that the estimated treatment effects differ only slightly between both methods. When analysing heterogeneous treatment effects, however, linear regressions are easier to implement and the results are easier to interpret than with propensity score matching. All in all, the program has significant positive effects, which are especially large for problem groups. Therefore, the Hamburg wage subsidy program has not only overall positive effects but also reaches the target group.