Wage-Rate Subsidies for Dislocated Workers

摘要: An array of innovative policies has been suggested to address more effectively the needs dislocated workers. In this paper, we model and simulate impacts a wage-rate subsidy (or salary supplement) program in which worker who becomes reemployed would receive payment equal one-half difference between wage previously earned currently earned. The simulations are based on search that is institutionally rich provides estimates by incorporating empirical results from reemployment bonus experiments were conducted mid- late-1980s. includes several groups workers other than therefore degree these might be crowded out jobs program. suggest paid for two years after shorten unemployment spells nearly 2 weeks, increase employment about 900 1000 per 100,000 labor force. But also raise possibility gains could come at expense workers; is, experience small increases duration, decreases levels almost fully offset Three factors may mitigate crowding-out crowding widely dispersed over various non-dislocated workers, structural changes result dislocation some (and drive need policy like subsidy) benefit quite sensitive one our assumptions. We compare with bonus, show can structured so as give identical results.