EconStor >
Institut für Weltwirtschaft (IfW), Kiel >
Economists Online >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/3047
  
Title:Designing employment subsidies
Authors:Orszag, Jonathan Michael
Snower, Dennis J.
Issue Date:2003
Citation:[Journal:] Labour economics [ISSN:] 0927-5371 [Volume:] 10 [Year:] 2003 [Issue:] 5 [Pages:] 557-572
Abstract:The paper examines the relative effectiveness of two policy proposals in reducing unemployment and working poverty: hiring subsidies and wage subsidies. The hiring subsidies are targeted exclusively at the unemployed and are provided only for a limited period of time. The wage subsidies, on the other hand, are granted to all low-wage earners regardless of their employment history and are of limitless duration. Our analysis indicates that the relative effectiveness of the two policies depends on workers' prospective wage growth. The more upwardly mobile workers are (i.e. the more their wages rise with employment duration), the more effective will unemployment vouchers be relative to low-wage subsidies. Conversely, the greater the danger that workers come to be trapped in dead-end jobs with flat wage profiles, the more effective will low-wage subsidies be relative to unemployment vouchers.
Subjects:Unemployment
Poverty
Employment
wages
subsidies
Employment policy
JEL:J23
J32
J38
J64
J65
J68
Persistent Identifier of the first edition:doi:10.1016/S0927-5371(03)00035-6
Document Type:Article
Appears in Collections:Economists Online

Files in This Item:

There are no files associated with this item.

No. of Downloads:
last Month last 3 Month total
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/3047

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.