Record Details
Prospective analysis of a wage subsidy for Cape Town youth
ScholarsArchive at Oregon State University
| Field | Value |
|---|---|
| Title | Prospective analysis of a wage subsidy for Cape Town youth |
| Names |
Levinsohn, James
(creator) Pugatch, Todd (creator) |
| Date Issued | 2014-05 (iso8601) |
| Note | This is an author's peer-reviewed final manuscript, as accepted by the publisher. The published article is copyrighted by Elsevier and can be found at: http://www.journals.elsevier.com/journal-of-development-economics/. |
| Abstract | Persistently high youth unemployment is one of the most pressing problems in South Africa. We prospectively analyze an employer wage subsidy targeted at youth, a policy recently enacted by the South African government to address the issue. Recognizing that a credible estimate of the policy's impact requires a model of the labor market that itself generates high unemployment in equilibrium, we estimate a structural search model that incorporates both observed heterogeneity and measurement error in wages. Using the model to simulate the policy, we find that a R1,000/month wage subsidy paid to employers leads to an increase of R571 in mean accepted wages and a decrease of 12 percentage points in the share of youth experiencing long-term unemployment. |
| Genre | Article |
| Topic | Job search |
| Identifier | Levinsohn, J., & Pugatch, T. (2014). Prospective analysis of a wage subsidy for Cape Town youth. Journal of Development Economics, 108, 169-183. doi:10.1016/j.jdeveco.2014.02.006 |
