Targeting Tax Relief at Youth Employment

Matthew Webb, Casey Warman and Arthur Sweetman

No 10182, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Canada's Youth Hires program was a targeted employment subsidy that rebated employment insurance premiums to employers with net increases in insurable earnings for youth aged 18-24. Using a difference-in-differences approach, in each of two datasets statistically and economically significant employment impacts are observed. Most of the evidence suggests that the 2-2.4 weeks of increased employment resulted from an aggregate reduction in those not in the labour force, with at most a modest change in the unemployment rate. Many estimated effects are larger for males than females. Notably, strong evidence of displacement (substitution away from slightly older non-subsidized workers) is not observed. However, there may be a small reduction in full-time schooling for the targeted group.

Keywords: targeted tax policy; unemployment; unemployment insurance; displacement; youth unemployment (search for similar items in EconPapers)
JEL-codes: J23 J65 J68 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2016-08
New Economics Papers: this item is included in nep-lab and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Published - published in: Canadian Public Policy, 2016, 42 (4), 415–430.

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