Authors	Hujer, R., Caliendo, M. and Radic, D.
Year	2001
Reference	Ifo-Studien, 47 (2), pp. 163-199 This paper has been reprinted 2004 in: Merz, J., Zwick, M. (Eds.): MIKAS - Mikroanalysen und amtliche Statistik Vol.1, Statistisches Bundesamt, Wiesbaden pp. 249-283.
Keywords	Evaluation, Active Labour Market Policy, Wage Subsidies, Labour Demand, Matching, Difference-in-Differences
JEL-Classification	C13, C23, C25, H43, J64, J68
Presentations	European Economic Association - Lausanne 2001, Econometric Society European Meeting - Lausanne 2001, ZEW-Conference: Unemployment Causes and Cures - Berlin 2001, MIKAS Jahrestagung - Lüneburg 2002.
Download	Revised working paper version from January 2001: PDF
Abstract	Wage subsidies are used as one means to fight unemployment in Germany. Despite their growing importance evaluation studies are rather scarce and aim on the labour supply side. In this paper we estimate their effects on the labour demand using the IAB establishment panel. This approach has the advantage that substitution effects already 'net out' at the firm level. To account for the selectivity problem in microeconometric evaluation studies, we apply a conditional difference-in-differences approach, i.e. we use a matching approach to construct a suitable control group in a first step, followed by a difference-in-differences estimation. We concentrate on West German establishments and the time period 1995 to 1999 and evaluate programmes including employment integration measures and job creation schemes. We do not find any positive long-run effects on the employment for participating establishments.