Employment Subsidies and Substitutable Skills: An Equilibrium Matching Approach

Gabriele Cardullo and Bruno Van der Linden

No 2073, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The search-matching model is well suited for an equilibrium evaluation of labor market policies. When those policies are targeted on some groups, the usual juxtaposition of labor markets is however a shortcoming. There is a need for a setting where workers’ productivity depends on employment levels in all markets. This paper provides such a theoretical setting. We first develop a streamlined model and then show that it can be extended to deal with interactions among various labor market and fiscal policies. Simulation results focus on the effects of employment subsidies and in-work benefits and on their interactions with the profile of unemployment benefits and with active labor market programs.

Keywords: labor market programs; reductions of social security contributions; unemployment insurance; unemployment; wage bargaining; search-matching equilibrium (search for similar items in EconPapers)
JEL-codes: E24 J3 J41 J64 J65 J68 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2006-04
New Economics Papers: this item is included in nep-dge, nep-lab and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Published - published in: Applied Economics Quarterly, 2007, 53 (4), 375-404

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Related works:
Journal Article: Employment Subsidies and Substitutable Skills: An Equilibrium Matching Approach (2007)
Working Paper: Employment subsidies and substitutable skills: An equilibrium matching approach (2006)
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