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Newsletter: From Evidence to Action

CDE rountable: Jobs for young people: Is a wage subsidy a good idea?

Type :
Conference & seminar papers
Author :
Centre for Development Enterprise
Published :
2011
Link :

In November 2010, CDE hosted a Round Table to examine some of the key issues surrounding this proposal. These included: Would a wage subsidy raise employment levels. If so, by how much, and at what cost? Would this be an appropriate response to the unemployment crisis? And would it be sustainable? The issues involved are complex, and sometimes quite technical. The workshop sought to address them as systematically as possible by addressing, first, the central importance of employment growth in shaping South Africa’s long-term developmental prospects. Next, it dealt with the international experience of wage subsidies. It then analysed the effect of South Africa’s existing labour market policies on employment levels. Finally, it examined the results of a number of attempts to model the impact of wage subsidies on the South African labour market and to estimate the costs and benefits of such a policy. While some issues of policy design were discussed, the main focus of the Round Table was the feasibility, desirability and possible impact of the proposed wage subsidy. This report summarises the presentations and discussions, followed by concluding comments.