Do Wage Subsidies Increase Employment in Subsidized Firms?

Kangasharju, Aki

doi:10.1111/j.1468-0335.2006.00525.x

Cited by 51 publications

(47 citation statements)

References 28 publications

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“…209 Similar results are found by Kangasharju and Venetoklis (2003) and Hietala and Hietala (2004): the latter study found that the Combined Subsidy had almost negligible displacement effects.…”

supporting

confidence: 69%

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Activation Policies in Finland

Grubb

Singh

Tergeist

2009

OECD Social, Employment and Migration Working Papers

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JT03274864 www.oecd.org/els/workingpapersThis series is designed to make available to a wider readership selected labour market, social policy and migration studies prepared for use within the OECD. Authorship is usually collective, but principal writers are named. The papers are generally available only in their original language -English or Frenchwith a summary in the other.Comment on the series is welcome, and should be sent to the Directorate for Employment, Labour and Social Affairs, 2, rue André-Pascal, 75775 PARIS CEDEX 16, France.The opinions expressed and arguments employed here are the responsibility of the author(s) and do not necessarily reflect those of the OECD ABSTRACTThis report examines the performance of the Public Employment Service (PES) and the effectiveness of activation strategies in Finland. It covers the role of the key actors, the placement function of the PES, the structure of out-of-work benefits and the related incentives and disincentives for taking up work, and provides an overview of the different active labour market programmes (ALMPs).After reaching extremely high levels in the early 1990s, unemployment in Finland declined steadily until the onset of the current economic downturn which has seen a rapid increase in the number of jobseekers. In the short term, the main challenge is to combat high and potentially persistent unemployment. In the longer term, given the ageing population and the likelihood of skills shortages, the focus should be on promoting participation of under-represented groups in the labour market while also investing further in skills.The broadly-defined PES includes a variety of actors at the national, regional and local levels. Local Employment Offices enjoy a high degree of autonomy in providing employment services but their work is not sufficiently coordinated at the central level. The payment of unemployment benefits and ALMPs are managed by separate bodies, and local Labour Committees implement labour market conditions for benefit eligibility. Municipalities, which administer social assistance benefits, also provide some employment services for their unemployed clients. In 2004, separate labour force service centres (LAFOS) were introduced with staff detached from the local Employment Offices, municipal services, and in some cases from the national social security institution, to provide specialised assistance for hard-to-place jobseekers. Since 2006, municipalities finance half the cost of the previously nationally-funded unemployment assistance for long-term unemployed, while the State finances half the cost of the basic assistance elements of social assistance payments.Activation measures have been improved for more than a decade. Since 1998, assistance benefit recipients have been increasingly referred to active programmes, and an activation plan procedure was introduced in 2001 and strengthened in 2006. However, the unemployed are required to participate in the drawing-up of an "individual job-search plan" only after some months of unemployment, an...

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supporting

confidence: 69%

“…Kangasharju (2007) examines whether subsidised jobs, which have contributed to employment in subsidised firms, have merely substituted for non-subsidised ones. The results indicate that wage subsidies stimulate total employment, and have no sizeable effects on non-subsidised firms in the industry or the geographical area in question.…”

mentioning

confidence: 99%

Activation Policies in Finland

Grubb

Singh

Tergeist

2009

OECD Social, Employment and Migration Working Papers

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“…In general, wage subsidies are aimed at compensating the disadvantage position and (thereby) the potentially (perceived) lower productivity of the targeted workers. In that respect, wage subsidies for the disabled are quite comparable to subsidies targeted at other groups, as theoretically and empirically evaluated by, e.g., Bell et al [5], Burtless [8], Gerfin et al [16], Jaenichen and Stephan [20] and Kangasharju [21]. subsidy of one-third to two-thirds of the wage they pay to disabled workers.…”

Section: Introductionmentioning

confidence: 77%

Wage subsidies and hiring chances for the disabled: some causal evidence

Baert

2014

Eur J Health Econ

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We evaluate the effectiveness of wage subsidies as a policy instrument to integrate disabled individuals into the labour market. To identify causal effects, we conduct a large-scale field experiment in Belgium. Our results show that the likelihood of a disabled candidate receiving a positive response to a job application is not positively influenced by revealing entitlement to the Flemish Supporting Subsidy

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“…See e.g. Mühlau and Salverda, 2000 for the Netherlands, and the references for Finland cited in Kangasharju (2007), although Kangasharju himself finds more sizable employment effects.…”

mentioning

confidence: 99%

“…While these broad measures reduce labour costs for all workers in a particular wage range, many countries operate wage subsidies targeted at specific types of workers such as young or older workers (see OECD series Jobs for Youth and Ageing and Employment Policies), individuals with disabilities or healthrelated problems (see OECD series Sickness, Disability and Work), or the long-term unemployed (e.g., Kangasharju, 2007;Bernhard et al, 2008). They may be available permanently (for as long as the employment relationship lasts), or for limited periods of time.…”

mentioning

confidence: 99%

A Good Time for Making Work Pay? Taking Stock of In-Work Benefits and Related Measures across the OECD

Immervoll

Pearson

2009

OECD Social, Employment and Migration Working Papers

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Do Wage Subsidies Increase Employment in Subsidized Firms?

Cited by 51 publications

References 28 publications

Activation Policies in Finland

Activation Policies in Finland

Wage subsidies and hiring chances for the disabled: some causal evidence

A Good Time for Making Work Pay? Taking Stock of In-Work Benefits and Related Measures across the OECD

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