Evaluation of the Australian Wage Subsidy Special Youth ...

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how the outcomes from these methods changed according to the type of adjustment used
to correct for data flaws; fourthly: what picture do the various outcomes present for the
working of the Australian SYETP. In overview, it is a sensitivity analysis of the
underlying methodological assumptions.
Finally, it is useful in itself to examine the application of the various non-experimental
methods as in this study. This is because in practice they are frequently used for program
evaluation. Although some experimental data may exist for programs, in general
European and Australian evaluations need to rely on non-experimental data, from
administrative or survey sources. The reasons for this situation are likely to be many and
diverse. However it may be influential that non-experimental data are perceived to have
fewer associated political difficulties– and this counteracts the issue that there is no
public consensus that it is humane to apply experimental methods to social policy
programs. Instead, it is often true that the social policy is applied to all through law.
Sometimes, a small ‘pilot’ of a program is run, for example the New Deal Pilots in the
UK at the moment. The administrative and survey data can supply information that might
roughly give a treated and control group, but without the random assignment of
experimental design. Non-experimental data methods then need to be applied to the data
try to approximate the scientific experiment. However, even experimental data can
require the application of non-experimental methods. Experiments of any type can be
very difficult to implement once people are involved, and data difficulties arising from
loss of subject contact and other problems require adjustment through non-experimental
analysis methods – Heckman, Lalonde and Smith (1999) detail several examples.
1.2 Brief summary of the theory of wage subsidies
This section outlines the main rationale for wage subsidy programs, and presents the
basic conceptual framework within which this is usually analysed.
Wage subsidies can be general, i.e. covering any and all workers, or specific, i.e. targeted
to a particular group. Hamermesh (1978) defined 3 types of wage subsidy which differ
according to what part of the firm’s total employment is covered: