This is an interesting study
of the effects of a recent subsidised temporary employment scheme in the US.
Title of the study: An Evaluation of ARRA-Funded Subsidized Employment Programs.
ARRA stands for American Recovery and Reinvestment Act (2009).
The scheme concentrated
on the long term unemployed, and subsidised employment lasted up to 12 months.
Some of the conclusions
of the study were as follows, but note that the following four points do not do
the study justice: the study is made up of very roughly 50,000 words and 100
charts. So study it yourself if you want a fuller picture.
1. The scheme improved
the post subsidised employment earnings and employment record of those
involved. Those placed with private or “for-profit” employers benefited more
than those placed with public sector employers (p.50).
(Studies into similar
programs in Switzerland about ten years ago found likewise. See here and here.)
2. Private sector or “for-profit”
employers were more likely to retain subsidised employees after expiration of
the subsidy than public sector employers. Overall, 37% of subsidised employees
were retained in expiration of the subsidy.
3. Trying to induce
employers to retain subsidised employees when the subsidy expires seems to be
counter-productive.
4. Public sector
employers were more willing to retain less skilled employees than private
sector employees. (Surprising, since public sector employees tend to more
skilled than private sector ones, at least in the UK).
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