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Factor Subsidies, Employment Generation, and Cost per Job: A Partial Equilibrium Approach

Author

Listed:
  • D Holden

    (Department of Economics, University of Strathclyde, Glasgow G4 OLN, Scotland)

  • J K Swales

    (International Centre for Macroeconomic Modelling and the Fraser of Allander Institute, Department of Economics, University of Strathclyde, Glasgow G4 OLN, Scotland)

Abstract

Factor subsidies in a perfectly competitive setting are analysed. A very general model is used to derive expressions for the effect of a factor subsidy on the price and quantity of output and the two factor inputs. These expressions are differentiated to generate qualitative results for the impact of changes in the product-demand, production-function, and factor-supply parameters on the subsidy effects. A similar procedure is used to investigate the exchequer cost per job of general labour and capital subsidies in an industry with Cobb — Douglas technology. The analysis is relieved with illustrative simulations in which ‘representative’ parameter values are used.

Suggested Citation

  • D Holden & J K Swales, 1993. "Factor Subsidies, Employment Generation, and Cost per Job: A Partial Equilibrium Approach," Environment and Planning A, , vol. 25(3), pages 317-338, March.
    • Handle: RePEc:sae:envira:v:25:y:1993:i:3:p:317-338
    DOI: 10.1068/a250317
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    References listed on IDEAS

    as
    1. Paul Foley, 1992. "Local Economic Policy and Job Creation: A Review of Evaluation Studies," Urban Studies, Urban Studies Journal Limited, vol. 29(3-4), pages 557-598, May.
    2. J. R. Hicks, 1963. "The Theory of Wages," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-00189-7, September.
    3. F. Harrigan & P. McGregor & J. Swales, 1991. "A System-Wide Evaluation of Regional Economic Policies: The impact on the recipient region of a regional labour study," Economics Discussion / Working Papers 91-12, The University of Western Australia, Department of Economics.
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    Citations

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    Cited by:

    1. Figus, Gioele & Swales, J.Kim & Turner, Karen, 2018. "Can Private Vehicle-augmenting Technical Progress Reduce Household and Total Fuel Use?," Ecological Economics, Elsevier, vol. 146(C), pages 136-147.
    2. Harrigan, Frank & McGregor, Peter G & Swales, J K, 1996. "The System-Wide Impact on the Recipient Region of a Regional Labour Subsidy," Oxford Economic Papers, Oxford University Press, vol. 48(1), pages 105-133, January.
    3. Arie Bregman & Melvyn Fuss & Haim Regev, 1998. "The Effects of Capital Subsidization on Israeli Industry," Working Papers fuss-98-01, University of Toronto, Department of Economics.
    4. Gioele Figus & J Kim Swales & Karen Turner, 2017. "Can a reduction in fuel use result from an endogenous technical progress in motor vehicles? A partial and general equilibrium analysis," Working Papers 1705, University of Strathclyde Business School, Department of Economics.
    5. Arie Bregman & Melvyn Fuss & Haim Regev, 1998. "The Effects of Capital Subsidization on Israeli Industry," NBER Working Papers 6788, National Bureau of Economic Research, Inc.

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