Wages, Employment and Tenure of Temporarily Subsidized Workers: Does the Industry Matter?

Gesine Stephan ()
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Gesine Stephan: Institute for Employment Research (IAB), Nuremberg

No 5078, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper explores whether wage, employment and tenure outcomes of workers taking up a job subsidized by the German Federal Employment Agency differ by industry. The analysis utilizes administrative data and statistical matching techniques; it covers an observation period of 3.5 years. First, we conduct a within-industry comparison of temporarily subsidized and otherwise similar unsubsidized workers. The findings show for most industries that subsidized workers had similar short-run wages, but fared significantly better in the longer run. Second, we compare labor market outcomes of subsidized workers within each industry with those of similar subsidized workers in other industries. The main result is that cumulated wages of workers would not have differed significantly, if they had been hired in another industry instead. However, we find significant differences in short-term wages, employment and tenure outcomes across industries. Finally, from a fiscal point of view it seems more advantageous to subsidize workers hired in industries that are less subject to demand fluctuations.

Keywords: program evaluation; industry-specific effects; wage subsidies (search for similar items in EconPapers)
JEL-codes: J31 J38 J58 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2010-07
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (9)

Published - revised version published as 'Hétérogénéité sectorielle des effets d'un dispositif de subvention salariale sur les salaires et l'emploi en Allemagne' in: Travail et Emploi, 2014, 139, 61-74

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