Do Wage Subsidies Provide a Stepping-Stone to Employment for Recent College Graduates? Evidence from a Randomized Experiment in Jordan

Matthew Groh, Nandini Krishnan, David McKenzie and Tara Vishwanath
Additional contact information
Matthew Groh: World Bank
Nandini Krishnan: World Bank
Tara Vishwanath: World Bank

The Review of Economics and Statistics, 2016, vol. 98, issue 3, 488-502

Abstract: This study examines the impact of a randomized experiment in Jordan in which female community college graduates were assigned to receive a wage subsidy voucher. The wage voucher led to a 38 percentage point increase in employment in the short run, but the average effect is much smaller and no longer statistically significant after the voucher period has expired. The extra job experience gained as a result of the wage subsidy does not provide a stepping-stone to new jobs for these recent graduates, which appears to be due to productivity levels not rising above a binding minimum wage.

Keywords: Wage Subsidy; Youth Unemployment; Randomized Experiment (search for similar items in EconPapers)
JEL-codes: J08 J16 O12 O15 (search for similar items in EconPapers)
Date: 2016
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