Does a job guarantee pay off? The fiscal costs of fighting long-term unemployment in Austria

Simon Theurl and Dennis Tamesberger
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Simon Theurl: Chamber of Labour, Vienna, Austria
Dennis Tamesberger: Chamber of Labour, Linz, Austria

European Journal of Economics and Economic Policies: Intervention, 2021, vol. 18, issue 3, 364–378

Abstract: The idea of a job guarantee (JG) to tackle unemployment has become popular again over recent years. Critics often point to the fiscal costs and the macroeconomic impact of a government financing full employment. In this paper, we analyse the fiscal costs of a JG for long-term unemployed people over the age of 45 in Austria. We show that a JG pays off in the long run. Even if the amount of jobs to be provided increases in times of a recession, or if a government starts with a certain amount of jobs and increases it afterwards, the JG would pay for itself.

Keywords: job guarantee; employer of last resort; long-term unemployment; unemployment; fullemployment; budget; finance; Austria (search for similar items in EconPapers)
JEL-codes: H50 J20 J23 J45 J48 J68 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:elg:ejeepi:v:18:y:2021:i:3:p364-378

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