We use a labor search model with heterogenous households and firms to study the efficacy of a wage subsidy during a … that sector choose whether to lay off workers or keep them on payroll. A wage subsidy encourages firms to keep workers on … payroll, which speeds up labor market recovery after the pandemic ends. However, a wage subsidy can be costlier than enhancing …

take jobs that do not exploit their potential productivity. The aim of this paper is to evaluate the wage subsidy programme … treatment effect on treated individuals. The evaluation reveals improvement of the wage subsidy program in 2019 relative to 2018 …

We estimate the causal effects of a pandemic-era wage subsidy program in Canada on job losses and business closures … changes in the wage subsidy rate. The estimated net wage elasticity of employment was 0.11, implying a small aggregate … employment effect of the program and an estimated fiscal cost per job saved of nearly $200,000 per year. Subsidy payments caused …