Marginal Employment Subsidies

Marginal Employment Subsidies
Author: Organisation for Economic Co-operation and Development
Publisher: Organisation for Economic Co-operation and Development ; [Washington, D.C. : OECD Publications and Information Center
Total Pages: 108
Release: 1982
Genre: Business & Economics
ISBN:

Marginal Employment Subsidies

Marginal Employment Subsidies
Author: Commission of the European Communities. Directorate-General for Economic and Financial Affairs
Publisher:
Total Pages:
Release: 1982
Genre:
ISBN:

Marginal Employment Subsidies

Marginal Employment Subsidies
Author: Organisation for Economic Co-operation and Development. Manpower and Social Affairs Committee
Publisher:
Total Pages: 75
Release: 1982
Genre:
ISBN:

Marginal Employment Subsidization

Marginal Employment Subsidization
Author: Andreas Knabe
Publisher:
Total Pages: 0
Release: 2010
Genre:
ISBN:

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 of a new employee also entails subsidizing an incumbent worker (double marginal subsidization), the replacement of regular paid workers by outsourcing employment to newly established firms - a standard critique of marginal employment subsidies - can be avoided. This additional subsidy reduces the incentive to crowd out regular employment and results in even larger employment effects. Applying the subsidy scheme to the low-skill labor market in Germany, we show that employment can be substantially increased without imposing additional fiscal burden.