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The effectiveness of targeted wage subsidies for hard-to-place workers

Die Effizienz zielorientierter Lohnsubventionen für schwer vermittelbare Arbeitslose

Jaenichen, Ursula; Stephan, Gesine


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Abstract Targeted wage subsidies paid to employers are an important element of active labour market policies in Germany. This paper uses propensity score matching to investigate their effect on the employment and unemployment rates of subsidised hard-to-place workers. In a first scenario, we estimate the average treatment effect of a subsidy on previously unemployed individuals. A second scenario analyses the effects of a subsidy on employment probabilities conditional on taking-up employment. The third scenario investigates the additional effect of a subsidy on individuals, who have participated in a short-term training measure beforehand. Summing up and in line with the literature, the results show that subsidies have a favourable effect on the employment prospects of participants.
Thesaurusschlagwörter Federal Republic of Germany; labor market policy; unemployment compensation; employment policy; program; unemployment; subsidy
Klassifikation Arbeitsmarktpolitik
Methode empirisch; empirisch-quantitativ
Freie Schlagwörter Targeted wage subsidies; evaluation of labour market programmes; propensity score matching
Sprache Dokument Englisch
Publikationsjahr 2009
Seitenangabe S. 1209-1225
Zeitschriftentitel Applied Economics (2009)
DOI http://dx.doi.org/10.1080/00036840802600426
Status Postprint; begutachtet (peer reviewed)
Lizenz PEER Licence Agreement (applicable only to documents from PEER project)