Evaluation of the Australian Wage Subsidy Special Youth ...

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1: Wage subsidy theory and evaluation
1.1 Structure of this research
The first chapter introduces the motivation for the substantive research that forms the
later chapters. Following a general introduction to the themes which are developed in the
research, the theory of wage subsidies is reviewed. A brief preface then presents the key
issues in evaluation of social programs such as wage subsidies. Empirical evidence for
wage subsidies is then treated in several parts. Firstly, a selection of conclusions from
overseas evaluations for wage subsidies is canvassed in an overview that gives a
background for the Australian studies that follow in subsequent chapters and form the
substance of this research. Only very recent work is included in this overseas appraisal, as
several very comprehensive reviews have lately been published in this area. The chief
aim is to draw out useful questions that are addressed later within this study. Australian
wage subsidies are not covered in this chapter, but are the focus of the next chapter.
Australian wage subsidies are reviewed in Chapter 2. A historical essay presents an
overview of the operation and economic environment of SYETP. The context is then
useful in assessing the processes for participation and employment for evaluation
modelling. The past evaluation evidence relating to SYETP is critically assessed. In an
effort to maintain clarity of exposition, the theory associated with the econometric
techniques applied is not in the literature review. Instead, each method is expounded
within each later study where they are applied. As a result, propensity score matching
methods for example, are discussed in study 2 where they are first applied.
As a result of the critical review of past evaluation attempts of SYETP, a series of studies
present new evidence for SYETP which attempt to account for the imperfections
identified in past evidence. This is then new evidence for the Australian wage subsidy
program, SYETP.