The Displacement Effect of Labour-Market Programs: Estimates from the MONASH Model

Peter Dixon and Maureen Rimmer

Centre of Policy Studies/IMPACT Centre Working Papers from Victoria University, Centre of Policy Studies/IMPACT Centre

Abstract: A key question concerning labour-market programs is the extent to which they generate jobs for their target group at the expense of others. This effect is measured by displacement percentages. We describe a version of the MONASH model designed to quantify the effects of labour-market programs. Our simulation results suggests that: (1) labour-market programs can generate significant long-run increases in employment; (2) displacement percentages depend on how a labour-market program affects the income trade-off faced by target and non-target groups between work and non-work; and (3) displacement percentages are larger in the short run than in the long run.

Keywords: labour-market programs; displacement percentage; CGE modelling (search for similar items in EconPapers)
JEL-codes: C68 J23 J63 (search for similar items in EconPapers)
Date: 2005-07
New Economics Papers: this item is included in nep-cmp and nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:cop:wpaper:g-154

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