The impact of wage subsidies on the employment of disadvantaged and/or marginalised young people

Rapid evidence assessment technical report

This report forms part of the Youth Employment Toolkit, a free online resource published by Youth Futures Foundation that presents summaries of evidence on interventions that are used to help young people who are out of work get jobs.

Wage subsidies aim to assist disadvantaged jobseekers into employment (Crichton and Maré, 2013). They are typically provided by public employment services and supplied at times of employment shocks and for groups who compared to others are struggling to access the labour market. They can take numerous forms including transfers of money to employers, and reduction in employer social security contributions. Their role is to partially or completely cover employee wages or non-wage employment costs. They can be used to cover competitive vacancies, or to create vacancies for the group supported including vacancies for on-the-job training and apprenticeships as well as employment.

Although substantial evidence exists regarding the effect of wage subsidies on employment outcomes, their effects specifically on young people’s employment have yet to be examined using a specific, robust evidence synthesis.

Objectives

The main aim of this review was to examine the impact of wage subsidies on youth employment, and particularly the employment of disadvantaged or marginalised young people, in high-income countries. In line with Youth Futures Foundation’s mission of enhancing employment outcomes for young people from marginalised backgrounds, the focus was on determining the impact of wage subsidies on supporting young people to enter non-subsidised, paid employment. Wage subsidy programmes are intended to provide participants with opportunities to improve and hone work-related and employability skills and to build networks, in order to support and accelerate their entry into non-subsidised, paid employment.