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

Schünemann, Benjamin and Lechner, Michael and Wunsch, Conny. (2015) Do Long-term Unemployed Workers Benefit from Targeted Wage Subsidies? German Economic Review, 16 (1). pp. 43-64.

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Official URL: http://edoc.unibas.ch/49399/

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Abstract

We 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.
Faculties and Departments:06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Arbeitsmarktökonomie (Wunsch)
UniBasel Contributors:Wunsch, Conny
Item Type:Article, refereed
Article Subtype:Research Article
Publisher:Blackwell
ISSN:1465-6485
e-ISSN:1468-0475
Note:Publication type according to Uni Basel Research Database: Journal article
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Last Modified:24 Jul 2018 12:50
Deposited On:24 Jul 2018 12:50

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