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

Michael Lechner, Benjamin Schünemann and Conny Wunsch

Working papers from Faculty of Business and Economics - University of Basel

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.

Keywords: Wage subsidy; long-term unemployment; regression discontinuity (search for similar items in EconPapers)
JEL-codes: J08 J23 (search for similar items in EconPapers)
Date: 2013-10-01
New Economics Papers: this item is included in nep-eur
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Citations: View citations in EconPapers (8)

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Related works:
Journal Article: Do Long-Term Unemployed Workers Benefit from Targeted Wage Subsidies? (2015)
Journal Article: Do Long-Term Unemployed Workers Benefit from Targeted Wage Subsidies? (2015)
Working Paper: Do Long-term Unemployed Workers Benefit from Targeted Wage Subsidies (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:bsl:wpaper:2013/14

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