Evaluation of the Australian Wage Subsidy Special Youth ...

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30 2.1 Review of Australian wage subsidy evaluation evidence The brief overseas review in the first chapter showed relatively few evaluations of wage subsidies exist, and empirical evidence for wage subsidies is not well founded. As this section will show, wage subsidy programs in Australia also have little publicly available evaluation evidence. Microeconomic evaluation is selected, using individual data, addressing the issue of whether the subsidy leads to better employment experience for participants after the program ends. The evidence is limited to published items that can be accessed by the public. Only recent evidence is compiled, corresponding approximately to the period starting with the 1980’s and onward, since this is the period of the later analysis. However it becomes evident in reviewing the literature that in fact most programs only started within the 1970’s, and publicly available evaluation work occurred mostly in the mid-1980’s and l990’s. Paterson (1982) in discussing evaluation activities in Australia pointed out that “…In Australia government involvement in the area of manpower programs is a relatively new phenomenon. Experience with manpower program evaluation is therefore limited.” (Paterson (1982): 1). The timing of this statement marked the general beginning of Australian evaluation activities and publications. Wage subsidies form only a part of the array of labour market programs available, and so evaluation of these in turn forms only a small part of the existing Australian evaluation literature available. Evaluation evidence for other program types such as training for Australia can be found generally reviewed in Webster (1998, 1997a). Although subsidised apprenticeships were available, for example CRAFT (Commonwealth Rebate for Apprenticeship Full-time Training), these are not dealt with as they are deemed to be mostly a training subsidy. 4 Also not covered are programs with 4 In support of this, in references such as Kesteven (1987) and Hoy (1983) they are categorized as education programs. The design did allow for a small amount of on-the-job training. For example Merrilees (1984) refers to wage subsidies in CRAFT for this reason, however the grand focus was apprenticeship training.
31 limited applications, such as for special needs groups only, for example the disabled or Aboriginal and Torres Strait Islanders. This is because the limited application means such programs were not reasonably comparable i.e. a wage subsidy targeted to a reasonable extent of the population as the SYETP was. Because so few wage subsidy evaluations exist, some information about the existence of other wage subsidy programs in Australia is also provided even if no evaluation evidence could be found for them. SYETP is covered separately in the next section. However, SYETP was the first widespread wage subsidy program applied in Australia and so also the first wage subsidy program in Australia for which evaluation attempts were made. SYETP was not the only employment based program of ‘work experience’ available that was subsidy based, in 1983. Other, usually brief programmes, have also operated, sometimes alongside SYETP. SYETP was however by far the largest subsidy, making up 69.2 cent of all new programme placements (flow only) in 1980/81 (BLMR (1983) p16, table 3.1, final column). More recently, other subsidy programmes have been evaluated and the details of these are now presented. 2.1.1 Adult Wage Subsidy Scheme The list of labour market programmes compiled by Routley (1984) describes the Adult Wage Subsidy Scheme (AWSS), which was introduced during 1983. This programme briefly coexisted with SYETP within the National Employment and Training System (NEAT), an active labour market programme combining training and wage subsidies. Chapman (1985) p101 points out that AWSS was introduced by the outgoing Fraser Liberal government in response to the Australian recession starting after 1981, and initially retained by the incoming Hawke Labour government. Subsidies in amounts of up to $125 per week, for an up to 52 week period, were available to long term unemployed, further defined as “…adults who have been unemployed for a lengthy period” (Routley (1984): 3). BLMR (June 1984) p168 indicates that AWSS operated in a similar fashion to the extended SYETP in 1983-4, with a 17 week period at $100 per week followed by another 17 week period at $75 per week. Those aged over 24 with 8 of the last 12 months registered with the CES as unemployed and away from full-time education were eligible.
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 and 42: 25 Table 1.3 collects together some
Page 43 and 44: 27 Table 1.3 Brief overview of rece
Page 45: 29 necessarily brief. Then, the evi
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
Page 93 and 94: 77 Table 2.17 State usage of progra
Page 95 and 96: 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
Page 289 and 290:
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
Page 295 and 296:
279 Table A2.3 Probit of SYETP part
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281 (0.22) (0.44) (0.67) (0.89) Tra
Page 299 and 300:
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
Page 309 and 310:
Page 311 and 312:
Page 313 and 314:
Page 315 and 316:
Page 317 and 318:
301
Page 319 and 320:
BLMR Bureau of Labour Market Resear
Page 321 and 322:
Fay, R.G. (1996) "Enhancing the eff
Page 323 and 324:
Heckman J.J. and Smith, J. A. (1998
Page 325 and 326:
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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