Evaluation of the Australian Wage Subsidy Special Youth ...

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environments. As the former section showed, the ambiguity in the theory arises from
whether within a given economic context, labour demand and supply elasticities,
reservation wages and subsidy amount, a gain to employment eventuates. In this sense,
every program needs to be assessed, and reassessed over time, in order to discover under
what environment a gain can be found. This takes into account the dynamic aspects of
programs, as microeconomic evaluation can hinder the appreciation of this characteristic.
This is because the static evaluation process loses the sense of the variation in conditions
that is naturally part of the macroeconomic setting.
In conclusion, two strong themes are identified. Firstly, the non-experimental evidence is
not sufficiently thorough in methodology. The key suggestion seems to be that there is
insufficient testing of alternative methods, assumptions and model specifications.
Secondly, there remains empirical ambiguity as to whether wage subsidies provide
employment gains. Some of this uncertainty stems from the inadequate non-experimental
evaluation evidence, so that the employment outcomes attributed to the wage subsidy
cannot be deemed well established. As well, not all evaluations have found positive gains
to employment following wage subsidies, although this to some extent is again due to the
caveats pertinent to the quality of the non-experimental evaluation methods.
In the following analysis, these themes are addressed via re-analysis of the Australian
wage subsidy Special Youth Employment and Training Program (SYETP). The chief
goal is to submit a further contribution as to whether this wage subsidy gave employment
gains. Alongside this, by exploring alternative specifications and methods, the subsidiary
aim is to more rigorously extend the non-experimental evaluation of SYETP.