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Subsidies for substitutes? : New evidence on deadweight loss and substitution effects of a wage subsidy for hard-to-place job-seekers

Author

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  • Moczall, Andreas

    (Institute for Employment Research (IAB), Nuremberg, Germany)

Abstract

"This paper estimates substitution effects of the German active labour market programme 'JobPerspektive'', a wage subsidy for hard-to-place welfare recipients. Using a novel panel of the entire population of German establishments with full information on unsubsidized and subsidized employment, counterfactual employment levels of subsidized employers are modelled by way of matching on the propensity score of receiving the subsidy. Using the same method, the substitution of particular groups of workers, including those subsidized by other programme types, is investigated as well. Results provide little evidence for widespread substitution of regular workers due to receiving this particular subsidy; in fact, regular employment is somewhat increased in West Germany as a result of subsidization. Furthermore, JobPerspektive is being used by employers in lieu of wage-paying work opportunities, and receiving JobPerspektive causes establishments to employ more workers with regular hiring subsidies." (Author's abstract, IAB-Doku) ((en))

Suggested Citation

  • Moczall, Andreas, 2013. "Subsidies for substitutes? : New evidence on deadweight loss and substitution effects of a wage subsidy for hard-to-place job-seekers," IAB-Discussion Paper 201305, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    • Handle: RePEc:iab:iabdpa:201305
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    References listed on IDEAS

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    2. Vallizadeh, Ehsan & Muysken, Joan & Ziesemer, Thomas, 2013. "Migration, unemployment, and skill downgrading : a specific-factors approach," IAB-Discussion Paper 201313, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Pauser, Johannes, 2013. "Capital mobility, imperfect labour markets, and the provision of public goods," IAB-Discussion Paper 201309, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Werner, Daniel, 2013. "New insights into the development of regional unemployment disparities," IAB-Discussion Paper 201311, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    5. Mönnig, Anke & Zika, Gerd & Maier, Tobias, 2013. "Trade and qualification : linking qualification needs to Germany's export flows," IAB-Discussion Paper 201307, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    6. Ulrike Huemer & Rainer Eppel & Marion Kogler & Helmut Mahringer & Lukas Schmoigl & David Pichler, 2021. "Effektivität von Instrumenten der aktiven Arbeitsmarktpolitik in unterschiedlichen Konjunkturphasen," WIFO Studies, WIFO, number 67250.
    7. Joachim Wolff & Gesine Stephan, 2013. "Subsidized work before and after the German Hartz reforms: design of major schemes, evaluation results and lessons learnt," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-24, December.
    8. Moczall, Andreas, 2015. "The effect of hiring subsidies on regular wages," IAB-Discussion Paper 201501, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    9. Christian Merkl & Enzo Weber, 2020. "Raus aus der Neueinstellungskrise! [End the Recruitment Crisis!]," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 100(7), pages 507-509, July.
    10. Bossler, Mario, 2013. "Recruiting abroad: the role of foreign affinity and labour market scarcity," IAB-Discussion Paper 201319, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    11. Moczall, Andreas, 2015. "The effect of hiring subsidies on regular wages," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113225, Verein für Socialpolitik / German Economic Association.
    12. Weber, Enzo & Zika, Gerd, 2013. "Labour market forecasting : is disaggregation useful?," IAB-Discussion Paper 201314, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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    More about this item

    Keywords

    Bundesrepublik Deutschland ; berufliche Reintegration ; Beschäftigungseffekte ; Eingliederungszuschuss ; Erfolgskontrolle ; Langzeitarbeitslose ; Lohnkostenzuschuss ; schwervermittelbare Arbeitslose ; Arbeitsgelegenheit ; Arbeitslosengeld II-Empfänger ; arbeitsmarktpolitische Maßnahme ; Wirkungsforschung ; 2007-2011;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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