Evaluation of the Australian Wage Subsidy Special Youth ...

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26 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.
27 Table 1.3 Brief overview of recent European wage subsidy evidence considered Author Country Program period/data Method Wage subsidy employment outcome Bonjour et al. (2001) Britain 1998 Propensity score matching + wage subsidy (Employment option) relative to other Bonnal et al. (1994) France 1986-88 Parametric Econometric modelling Breen (1991) Ireland 1982-88 Parametric Econometric modelling Cockx et al. (1996) Eichler and Lechner (1998) Gerfin and Lechner (2000) Harkman and Johansen (2000) Lalive et al. (2000) Belgium 1991-93 Parametric Econometric modelling East Germany (Sachsen- Anhalt) 1991-97 Propensity score matching Switzerland 1997-98 Propensity score matching Sweden 1996 Parametric Econometric modelling Switzerland 1997-99 Parametric Econometric modelling Larsson (2000) Sweden 1991-97 Propensity score matching O’Connell and Ireland 1992 Parametric Mcginnity Econometric (1997) modelling Rosholm (1998) Denmark 1983-90 Parametric Econometric modelling options in NDYP. Used in most programs with training, not separately evaluated Used in temporary employment programs, not separately evaluated + if combined with training + emp (neg unemp) at 1yr + emp + / n.s. (emp) at 1yr + females emp. transition n.s. males + YP v. LMT at 1yr (emp and earnings) + emp + earnings/wage n.s priv.sector males 16-24y, NEG females 16-24y Sianesi (2001, Sweden 1994-99 Propensity score + emp 2002) matching Notes: n.s.=not statistically significant;+ = positive effect or coefficient, neg=negative effect or coefficient emp=employment;
Page 1: i Evaluation of the Australian Wage
Page 5 and 6: v Declaration I hereby declare that
Page 7 and 8: in method and assumptions. The orth
Page 9 and 10: 3.3 Data and variables used for est
Page 11 and 12: List of Tables and Figures Figure 1
Page 13 and 14: Table A2.0b Univariate Probit of pa
Page 15 and 16: xv Abstract The job subsidy Special
Page 17 and 18: 1 1: Wage subsidy theory and evalua
Page 19 and 20: 3 programs of providing benefits an
Page 21 and 22: 5 The empirical methods used for th
Page 23 and 24: 7 how the outcomes from these metho
Page 25 and 26: 9 employment effect could be mainly
Page 27 and 28: 11 Real Wage Employment Figure 1.1:
Page 29 and 30: 13 are two types of unemployment, s
Page 31 and 32: 15 Real wages are predetermined whe
Page 33 and 34: 17 Vella (1998), Heckman, Lalonde a
Page 35 and 36: 19 Each individual has two potentia
Page 37 and 38: 21 this case, if there was no data
Page 39 and 40: 23 correlation for the error of the
Page 41: 25 Table 1.3 collects together some
Page 45 and 46: 29 necessarily brief. Then, the evi
Page 47 and 48: 31 limited applications, such as fo
Page 49 and 50: 33 who participated. It was conclud
Page 51 and 52: 35 term unemployed for over 12 of t
Page 53 and 54: 37 importance of the subsidy second
Page 55 and 56: 39 differences in characteristics t
Page 57 and 58: 41 Matching methods are theoretical
Page 59 and 60: 43 2.2 SYETP implementation As SYET
Page 61 and 62: 45 In July1978, the subsidy was cal
Page 63 and 64: 47 In January 1979, variations were
Page 65 and 66: 49 benefits were paid at a slightly
Page 67 and 68: 51 2.2.3 SYETP operation Earlier re
Page 69 and 70: 53 ceiling constraints’ applied t
Page 71 and 72: 55 Award Conditions for employment
Page 73 and 74: 57 Harris (2001) claims that during
Page 75 and 76: 59 display boards listed details of
Page 77 and 78: 61 restriction was used. If there w
Page 79 and 80: 63 to the end of the 1980’s. An o
Page 81 and 82: 65 for teens overall had risen, emp
Page 83 and 84: 67 for Australia using data from th
Page 85 and 86: 69 training, can provide a form of
Page 87 and 88: 71 employer survey estimates were t
Page 89 and 90: 73 provisions for SYETP and extende
Page 91 and 92: 75 withdrawals occurred at similar
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77 Table 2.17 State usage of progra
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79 2.3.1 Stretton (1982, 1984) 53 S
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81 Stretton attributed the success
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83 included in the employment model
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85 completers. Their argument was t
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87 was an issue for the data. Unlik
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89 Table 2.21 Richardson (1998) Est
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91 2.3.5 General discussion Some ge
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93 Controlling for differences in i
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95 taken by a previous researcher a
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97 If employability is assumed to b
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99 suitability of the underlying as
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101 Heckman, Lalonde and Smith (199
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103 effect on employment relative t
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105 Table 3.1, Part A Employment eq
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107 (-1.80) (-1.80) Tradesperson -0
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109 duration of Pre-June 1984 unemp
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111 4: Study 2 Propensity score mat
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113 Propensity score matching provi
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115 4.2 Propensity score matching m
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117 covariates that influence the a
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119 (7) E(Y c | D=1) = E P(X) {E[Y
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121 For CIA to be plausible, a ‘r
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123 employment and programme partic
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Highest qualification in 1984 (1.56
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127 4.6 Distribution of the propens
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129 Figure 4.3 Histograms of estima
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131 Table 4.5 Summary statistics fo
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133 Table 4.5, that the variance of
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135 Table 4.6 Matching results, Sin
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137 Table 6.3 using Swedish data wi
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139 matching is the ability to weed
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141 Table 4.7 Matching results, All
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143 the unobserved component. If th
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145 5: Study 3 Attrition and non-re
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147 occur by design, because the mi
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149 (1990) extended and improved th
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151 (10) A* = δ 0 + δ 1 x +δ 2 z
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153 again from September to Novembe
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155 5.5.2 Univariate examination of
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157 lower, the job lengths are only
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159 Work limited by health 1984 0.1
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161 The characteristics of the SYET
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163 para-professional Mother not em
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165 comparison group where the shar
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167 5.5.4 Attrition: natural attrit
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169 both sources that impose change
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171 para-professional Father not em
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173 work in later sections, this su
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175 Table 5.6: Effect of selection/
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177 appropriate to discard these fr
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179 Australia/Tasmania. Amongst tho
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181 Table 5.5a Summary statistics b
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183 5.6.1.2 Effects of the non-resp
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185 3 years + -0.35 -0.47 -0.34 -0.
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187 5.7 Multivariate analysis of ef
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189 proportion of time spent unempl
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191 post-school qualification, and
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193 Generally, those variables foun
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195 longj0 Longest job by 1984 < 1
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197 adopted in order to maintain co
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199 6: Study 4 Weighting to counter
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201 Table 6.1, part A Employment eq
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203 Methodist 0.133 0.261 (0.77) (1
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205 CEP referrals 1984 0.143* 0.128
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207 6.2 Results of weighting the PS
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209 The distribution of the propens
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211 Table 6.3 Weighted probit used
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213 (0.76) Tradesperson mtrad 0.20
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215 Table 6.5 Summary statistics fo
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217 Table 6.7 Matching results, sin
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219 6.3 Discussion The comparison o
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221 the selection into SYETP and th
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223 Heteroskedasticity is a violati
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225 Table 7.1, Part A Employment eq
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227 (1.26) (1.28) (1.16) Mothers oc
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229 Other Post-School qualification
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231 7.1.2 Exclusion restriction in
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233 Finally, the third panel of new
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235 Table 7.2 summary of changes to
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237 schooling that was statisticall
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239 (0.25) (0.21) 3 years + -0.50 -
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241 Table 7.4 Summary of distributi
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243 7.2.2 Propensity score matching
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245 original model, but with the pe
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247 maintained, then the Heckman bi
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249 Table 7.6 Weighted Probit used
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251 Table 7.7 Summary of distributi
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253 8: Summary and Conclusions The
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255 over which it ran, the review m
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257 the Heckman and PSM methods wer
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259 posited that that such sensitiv
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261 Description Derivation and deta
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Appendix 2 Tables 263
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2 years 0.28 0.07 (1.70) (1.70) 3 y
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267 Table A2.0b Univariate Probit o
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269 Religion brought up in (1.52) (
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271 hq9_84 Year 9 of school or less
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273 Table A2.1 Continued Means and
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275 mtrad Tradesperson 0.04 0.04 0.
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277 Year 9 of school or less -0.19
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279 Table A2.3 Probit of SYETP part
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281 (0.22) (0.44) (0.67) (0.89) Tra
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283 Table A2.5a Univariate probit f
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285 Manager/professional/para-profe
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3 years + -0.04 (2.13)* CEP referra
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289 Table A2.6 Part A Employment eq
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291 Table A2.6 Part B Selection/par
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Page 317 and 318:
301
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BLMR Bureau of Labour Market Resear
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Fay, R.G. (1996) "Enhancing the eff
Page 323 and 324:
Heckman J.J. and Smith, J. A. (1998
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Lewis, H.G. (1963) "Unionism and re
Page 327 and 328:
Quandt, R. (1972) "A new approach t
Page 329 and 330:
Stromback, M. and Dockery, A. (2000
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