Document Type
Policy Brief
Date
1999
Keywords
Social welfare, labor market subsidies, welfare and poverty, welfare programs, wage differentials
Language
English
Series
Reports Series
Disciplines
Social Welfare
Description/Abstract
In the United States and Europe there has been renewed interest in subsidizing firms that employ disadvantaged workers as a means of addressing poverty and other social problems. In contrast, the prevailing practice is largely to provide social welfare benefits directly to individuals. Which approach is better? We re-examine the relative merits of employee- versus employer-based labor market subsidies and conclude there are good reasons to continue to rely on the direct, employee-based approach. In practice, low-wage workers are seldom either low-skill or low-income workers. Furthermore, workers who might quality for a firm-based subsidy are reluctant to so identify themselves for fear of being stigmatized or labeled as "needy." Thus, employer-based subsidy programs have lower participation rates and correspondingly higher per capita expenditures than employee-based subsidy programs.
Recommended Citation
Dickert-Conlin, Stacy and Holtz-Eakin, Douglas, "Helping the Working Poor: Employer- vs. Employee-Based Subsidies" (1999). Center for Policy Research. 29.
https://surface.syr.edu/cpr/29
Source
Metedata from RePec
Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.