Fiscal stimuli in the form of job creation subsidies

Chun-Hung Kuo and Hiroaki Miyamoto

Journal of Macroeconomics, 2015, vol. 43, issue C, 267-284

Abstract: This paper examines the effects of fiscal stimuli in the form of job creation subsidies in a DSGE model with search friction and endogenous job separation. We consider two types of job creation subsidies: a subsidy for the cost of posting vacancies and a hiring subsidy. This paper finds that the effects of job creation subsides on unemployment differ between models with and without endogenous job separation. While a positive job creation subsidy shock lowers unemployment in a model without endogenous job separation, it increases unemployment in a model with endogenous job separation. We also find that while qualitatively the effects of a vacancy cost subsidy on the economy are similar to those of a hiring subsidy, quantitatively they are different.

Keywords: Fiscal policy; Hiring subsidy; Unemployment; Search and matching (search for similar items in EconPapers)
JEL-codes: E24 E62 J64 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S016407041500004X
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Fiscal Stimuli in the Form of Job Creation Subsidies (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:43:y:2015:i:c:p:267-284

DOI: 10.1016/j.jmacro.2014.12.004

Access Statistics for this article

Journal of Macroeconomics is currently edited by Douglas McMillin and Theodore Palivos

More articles in Journal of Macroeconomics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().