Evaluation of the Australian Wage Subsidy Special Youth ...

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benefits were paid at a slightly higher rate to older ages, later both the age variation in
unemployment benefit and SYETP subsidy grew to be quite unfavourable for 15-17 year
olds relative to other ages. Yet this adds to the variation in award rate payments by age,
sex and occupation/industry so that there was a complex picture of variation in how the
subsidy comparison worked for 15-24 year olds. In practice the subsidy to 15-19 year
olds was positive in relation to the proportionately higher share of the award rate it
covered for this age group. The impact of this is discussed in the evaluation evidence to
follow where it was found that for subgroups of the eligible target group, the subsidy fell
particularly favourably with employers leading to a greater intensity of placements for
these groups. 22
It becomes clear from Table 2.4 that the SYETP subsidy paid to employers was usually
higher than the benefit payable to the unemployed participant. 23 When benefits shown in
Table 2.4 are compared to the average award rate shown in Table 2.3, it can be seen that
it is likely that participants were better off remunerated under the wages subsidy than
with benefits, although non-pecuniary related benefits cannot be accounted for in this
comparison. As well, the age/gender/occupation variation in award rates is not obvious
from Table 2.3, and these would be important. However these figures can be used to
roughly indicate underlying reservation wages for this group.
22 Girls 15-17 years old got SYETP mostly, as these faced the lowest award rates, so the wage discount
from the subsidy was greatest.
23 In Australia in 1983, unemployment benefit was income tested on own income, but not parental benefit,
and paid to those registered with the CES, payable to those unemployed who were able and willing to work
and taking reasonable steps to obtain work. To gauge the scale of payments to youths: At June 1983 about
300,000 15-24 year olds were paid unemployment benefit, benefits to 15-24 year olds were roughly
estimated to cost $990 million in 1982/3 (DEYA (1983): xxix).