Template-type: ReDIF-Paper 1.0
Author-Name: Chun-Hung Kuo
Author-Name-First: Chun-Hung
Author-Name-Last: Kuo
Author-Email: chkuo@iuj.ac.jp
Author-Workplace-Name: International University of Japan
Author-Workplace-Homepage: http://www.iuj.ac.jp/
Author-Name: Hiroaki Miyamoto
Author-Name-First: Hiroaki
Author-Name-Last: Miyamoto
Author-Email: miyamoto@pp.u-tokyo.ac.jp
Author-Workplace-Name: The University of Tokyo
Author-Workplace-Homepage: http://www.u-tokyo.ac.jp/en/
Title: Fiscal Stimuli in the Form of Job Creation Subsidies
Abstract: This paper examines the effects of fiscal stimuli in the form of job creation subsidies in a DSGE model with search frictions in the labor market. We consider two types of job creation subsidies: a subsidy to the cost of posting vacancies and a hiring subsidy. Our model demonstrates that qualitative effects of a vacancy cost subsidy are similar to those of a hiring subsidy. Quantitatively, however, the vacancy cost subsidy is more effective in lowering unemployment than the hiring subsidy. We also compute fiscal multipliers for both traditional increases in government spending and increases in job creation subsidies.
Classification-JEL: E24; E62; J64
Length: 20 pages
Creation-Date: 2014-05
Number: EMS_2014_06
File-URL: https://www.iuj.ac.jp/workingpapers/index.cfm?File=EMS_2014_06.pdf
File-Format: Application/pdf
File-Function: First version, 2014
File-Size: 260KB
Keywords: Fiscal Policy, Hiring Subsidy, Unemployment, Search and matching
Handle: RePEc:iuj:wpaper:EMS_2014_06