German wage subsidies: similar wages but longer job tenure

Abstract

"In Germany, targeted wage subsidies to employers are an important instrument of active labour market policy. Targeted wage subsidies are tailored to particular groups of unemployed persons and typically granted for a limited period of time. In this paper, IAB compares the wages and tenure of previously unemployed persons who took up either a subsidized or unsubsidized job, respectively. The results show that starting wages of subsidized employees and unsubsidized workers are very similar, while - due to higher subsequent employment shares - cumulated incomes of (previously) subsidized workers are higher. Furthermore, initially subsidized workers have a longer tenure than persons who were hired without the help of a subsidy." (Author's abstract, IAB-Doku) ((en))

Cite article

Ruppe, K. & Stephan, G. (2009): Förderung mit Eingliederungszuschüssen: Länger im Betrieb und gleicher Lohn. (IAB-Kurzbericht 25/2009), Nürnberg, 8 p.