Author: Peter B. Dixon and Maureen T. Rimmer
A key question concerning labour-market programs is the extent to which they generate jobs for their target group at the expense of others. This effect is measured by displacement percentages. We describe a version of the MONASH model designed to quantify the effects of labour-market programs. Our simulation results suggests that:
(1) labour-market programs can generate significant long-run increases in employment;
(2) displacement percentages depend on how a labour-market program affects the income trade-off faced by target and non-target groups between work and non-work; and
(3) displacement percentages are larger in the short run than in the long run.
JEL classification: C68, J23, J63
Keywords: labour-market programs, displacement percentage, CGE modelling.
Working Paper Number G-154 can be downloaded in PDF format. To print this you will need the Adobe Acrobat Reader.
Go to working papers page