Resource title

The effectiveness of employment vouchers : a simple approach

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Resource description

This paper explores the optimal design of subsidies for hiring unemployed workers (?employment vouchers? for short) in the context of a dynamic model of the labor market. Focusing on the short-term and long-term effects of the vouchers on employment and unemployment, the analysis shows how the optimal policy depends on the rates of hiring and firing, and on the problems of displacement and deadweight. It also examines the roles of the government budget constraint and of the level of unemployment benefits in optimal policy design. We calibrate the model and evaluate the effectiveness of employment vouchers in reducing unemployment for a wide range of feasible parameters.

Resource author

Jonathan Michael Orszag, Dennis J. Snower

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/2519

Resource license

Adapt according to the presented license agreement and reference the original author.