A Note on the Displacement Effects of Marginal Wage Subsidies
摘要
The efficiency of marginal wage subsidies, which are paid only for a firm's additional employment exceeding some reference level, suffers from intra-industry competition effects. Some firms might expand employment, but mainly at the cost of crowding out employment in other firms. Hence, critics expect that marginal subsidies are equivalent to general subsidies and create large fiscal costs without much gain in employment. We develop a model that specifically focuses on the displacement effects of marginal wage subsidies. Our results show that marginal subsidies generally create larger output and employment effects and are fiscally more efficient than general subsidies despite their between-firm displacement effects.
引用本文（GB/T 7714）
Andreas Knabe. A Note on the Displacement Effects of Marginal Wage Subsidies[J]. 經濟論文, 2008.
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