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Earnings Subsidies (earning + subsidy)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting100%

Selected Abstracts

Estimating the Effects of a Time-Limited Earnings Subsidy for Welfare-Leavers

ECONOMETRICA, Issue 6 2005
David Card
In the Self Sufficiency Project (SSP) welfare demonstration, members of a randomly assigned treatment group could receive a subsidy for full-time work. The subsidy was available for 3 years, but only to people who began working full time within 12 months of random assignment. A simple optimizing model suggests that the eligibility rules created an "establishment" incentive to find a job and leave welfare within a year of random assignment, and an "entitlement" incentive to choose work over welfare once eligibility was established. Building on this insight, we develop an econometric model of welfare participation that allows us to separate the two effects and estimate the impact of the earnings subsidy on welfare entry and exit rates among those who achieved eligibility. The combination of the two incentives explains the time profile of the experimental impacts, which peaked 15 months after random assignment and faded relatively quickly. Our findings suggest that about half of the peak impact of SSP was attributable to the establishment incentive. Despite the extra work effort generated by SSP, the program had no lasting impact on wages and little or no long-run effect on welfare participation. [source]

Do earnings subsidies affect job choice?

CANADIAN JOURNAL OF ECONOMICS, Issue 4 2009
The impact of SSP subsidies on job turnover, wage growth
Abstract This paper explores the impact of earnings subsidies on job duration and wage growth. We develop an analytical framework that predicts that convex subsidies increase job turnover and affect within-job and between-job wage growth. This framework is used to analyze the effects of the Canadian Self-sufficiency Project earnings subsidy. We find that the treatment group had shorter job duration and experienced faster wage growth than controls, which is consistent with the analytical model. Results for between-job wage growth hold after we correct for compositional bias, but we cannot rule out that within-job wage growth was not affected by the program. Ce mémoire examine l'impact des subventions aux gains sur la durée de l'emploi et la croissance des salaires. On développe un cadre d'analyse qui prédit que des subventions convexes accroissent le roulement des emplois et affectent la croissance des salaires entre les emplois et à l'intérieur d'une période d'emploi. Ce cadre d'analyse est utilisé pour ausculter les effets des subventions du Projet de l'Autosuffisance au Canada. Il appert que le groupe subventionné a fait l'expérience de durées d'emploi plus courtes et de croissance de salaires plus rapide que le groupe de contrôle, ce qui s'arrime aux prévisions du cadre d'analyse. Les résultats pour la croissance des salaires entre emplois sont robustes même après correction pour le biais de composition, mais on ne peut pas rejeter l'hypothèse que la croissance de salaires dans un emploi n'a pas été affectée par le programme. [source]

Estimating the Effects of a Time-Limited Earnings Subsidy for Welfare-Leavers

ECONOMETRICA, Issue 6 2005
David Card
In the Self Sufficiency Project (SSP) welfare demonstration, members of a randomly assigned treatment group could receive a subsidy for full-time work. The subsidy was available for 3 years, but only to people who began working full time within 12 months of random assignment. A simple optimizing model suggests that the eligibility rules created an "establishment" incentive to find a job and leave welfare within a year of random assignment, and an "entitlement" incentive to choose work over welfare once eligibility was established. Building on this insight, we develop an econometric model of welfare participation that allows us to separate the two effects and estimate the impact of the earnings subsidy on welfare entry and exit rates among those who achieved eligibility. The combination of the two incentives explains the time profile of the experimental impacts, which peaked 15 months after random assignment and faded relatively quickly. Our findings suggest that about half of the peak impact of SSP was attributable to the establishment incentive. Despite the extra work effort generated by SSP, the program had no lasting impact on wages and little or no long-run effect on welfare participation. [source]

Do earnings subsidies affect job choice?

CANADIAN JOURNAL OF ECONOMICS, Issue 4 2009
The impact of SSP subsidies on job turnover, wage growth
Abstract This paper explores the impact of earnings subsidies on job duration and wage growth. We develop an analytical framework that predicts that convex subsidies increase job turnover and affect within-job and between-job wage growth. This framework is used to analyze the effects of the Canadian Self-sufficiency Project earnings subsidy. We find that the treatment group had shorter job duration and experienced faster wage growth than controls, which is consistent with the analytical model. Results for between-job wage growth hold after we correct for compositional bias, but we cannot rule out that within-job wage growth was not affected by the program. Ce mémoire examine l'impact des subventions aux gains sur la durée de l'emploi et la croissance des salaires. On développe un cadre d'analyse qui prédit que des subventions convexes accroissent le roulement des emplois et affectent la croissance des salaires entre les emplois et à l'intérieur d'une période d'emploi. Ce cadre d'analyse est utilisé pour ausculter les effets des subventions du Projet de l'Autosuffisance au Canada. Il appert que le groupe subventionné a fait l'expérience de durées d'emploi plus courtes et de croissance de salaires plus rapide que le groupe de contrôle, ce qui s'arrime aux prévisions du cadre d'analyse. Les résultats pour la croissance des salaires entre emplois sont robustes même après correction pour le biais de composition, mais on ne peut pas rejeter l'hypothèse que la croissance de salaires dans un emploi n'a pas été affectée par le programme. [source]