04 April 2013

More Disappointing Labour Market Policy Outcomes

This new from Jordan:
Wage subsidies and soft skills training are two popular types of policies that governments are turning to around the world as part of their efforts to deal with high youth unemployment. Our experimental analysis shows these policies do not appear to have had large impacts on generating sustained employment for young, relatively educated women in Jordan. Short-term wage subsidies generated large and significant increases in employment while the subsidies were in effect, but most of these jobs disappeared when the subsidies expired. High minimum wages may be one reason, with firms saying that graduates were not productive enough to be affordable without subsidies.
Groh, Krishnan, McKenzie, and Vishwanath, The impact of training and wage subsidy programs on female youth employment in Jordan

I don't see much cause for optimism in getting any solid positive results from labour market interventions. Am I missing something?

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