We explore the far-reaching implications of low-wage subsidies on aggregate employment. Low-wage subsidies have three important effects. First, they promote employment of unskilled workers (who tend to be the ones who earn low wages). Second, by raising the payoff of unskilled work relative to...

This paper provides a theoretical and quantitative analysis of various types of wellknown employment subsidies. Two important questions are addressed: (i) How should employment subsidies be targeted? (ii) How large should the subsidies be? We consider measures involving targeting workers with...

This paper provides a theoretical and quantitative analysis of various types of wellknown employment subsidies. Two important questions are addressed: (i) How should employment subsidies be targeted? (ii) How large should the subsidies be? We consider measures involving targeting workers with...

Das heutige System der sozialen Mindestsicherung verhindert in Deutschland die Ausbildung eines Niedriglohnsektors. Dies ist eine wesentliche Ursache für die hohe Arbeitslosigkeit Geringqualifizierter. Dieser Beitrag stellt zwei häufig genannte Maßnahmen zur Überwindung sozialstaatlicher...

We study the subsidization of extra jobs in a general equilibrium framework. While the previous literature focuses on symmetric marginal employment subsidies where firms are rewarded when they increase employment but punished when they reduce their workforce, we consider an asymmetric scheme...

The paper reviews national and international experiences with different combinations of in-work benefits, subsidized employment, statutory minimum wages and implicit minimum wages defined by social assistance provisions. It calls for a cautious approach regarding the introduction of additional...

In this paper, we attempt to renew the interest in marginal employment subsidies. Such subsidies are paid only for a firm's additional employment exceeding some reference level and create larger employment stimuli at lower fiscal costs than general wage subsidies for all workers. If the hiring...

This paper explores whether wage, employment and tenure outcomes of workers taking up a job subsidized by the German Federal Employment Agency differ by industry. The analysis utilizes administrative data and statistical matching tech-niques; it covers an observation period of 3.5 years. First,...

Der Sachverständigenrat empfiehlt eine moderate Absenkung des Regelsatzes des Arbeitslosengeldes II und Hinzuverdienstmöglichkeiten. Auch wird ein Workfare-Angebot vorgeschlagen, dessen Wahrnehmung zum Bezug des vollen Arbeitslosengeldes II berechtigt. Daneben ist die Senkung des...

We analyze the impact of the COVID-19 pandemic and government policies on firms’ aid takeup, layoff and furlough decisions. We collect new survey data for 10,642 small, medium and large Danish firms, and match to government records of all aid-supported furloughed workers during the pandemic as...