Oskamp, Frank; Snower, Dennis J. - Institut für Weltwirtschaft (IfW) - 2006
We explore the far-reaching implications of low-wage subsidies on skill formation, aggregate employment and welfare …. Low-wage subsidies have three important effects. First, they promote employment of low-skilled workers (who tend to be the … reduce the incentive to become skilled. So they increase the low-skilled labor force which faces a relatively low employment …