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Experimental estimates of the impact of wage subsidies

Dubin, Jeffrey A. and Rivers, Douglas (1993) Experimental estimates of the impact of wage subsidies. Journal of Econometrics, 56 (1-2). pp. 219-242. ISSN 0304-4076. doi:10.1016/0304-4076(93)90107-G.

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The effects of a wage subsidy program on the duration of insured unemployment are investigated using experimental data. Participation in the experiment was voluntary and about one third of the subjects refused to take the subsidy voucher offered to them. Because subsidies appear to have stigmatic effects which tend to lower participation rates by high-skilled workers, experimental participants have longer average durations of unemployment than nonparticipants. However, correcting for self-selection, we find that wage subsidies can substantially increase a participant's probability of reemployment. Subsidies are also compared to a search bonus proposal which is also cost-effective, but, due to differences in participation patterns, has rather different effects.

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Additional Information:© 1993 Elsevier B.V. We would like to thank the Associate Editor and referees for helpful comments. Research support was provided by the Productive Employment Foundation. We are grateful to Allen V.C. Davis for his support and encouragement.
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Productive Employment FoundationUNSPECIFIED
Issue or Number:1-2
Record Number:CaltechAUTHORS:20170906-084144252
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Official Citation:Jeffrey A. Dubin, Douglas Rivers, Experimental estimates of the impact of wage subsidies, Journal of Econometrics, Volume 56, Issue 1, 1993, Pages 219-242, ISSN 0304-4076, (
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:81177
Deposited By: Ruth Sustaita
Deposited On:06 Sep 2017 17:01
Last Modified:15 Nov 2021 19:41

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