The Effectiveness of Targeted Wage Subsidies for Hard-to-Place Workers

Ursula Jaenichen (1) , Gesine Stephan (2)

1 Competence Center for Empirical Methods
2 Active Labor Market Policy

Targeted wage subsidies paid to employers are an important element of active labour market policies in Germany. This paper uses propensity score matching to investigate their effect on the employment and unemployment rates of subsidised hard-to-place workers. In a first scenario, we estimate the average treatment effect of a subsidy on previously unemployed individuals. A second scenario analyses the effects of a subsidy on employment probabilities conditional on taking-up employment. The third scenario investigates the additional effect of a subsidy on individuals, who have participated in a short-term training measure beforehand. Summing up and in line with the literature, the results show that subsidies have a favourable effect on the employment prospects of participants.

Mots clés: Social Sciences & Humanities

Ursula Jaenichen, Gesine Stephan. The Effectiveness of Targeted Wage Subsidies for Hard-to-Place Workers. Applied Economics, 2009, pp.1. ⟨10.1080/00036840802600426⟩. ⟨hal-00582284⟩