The Displacement Effect of Labour-Market Programs: MONASH Analysis

• PETER B. DIXON ^[1] ; MAUREEN T. RIMMER ^[1]
  1. [1] Monash University

     Monash University

     Australia

     
• Localización: Economic record, ISSN 0013-0249, Vol. 82, Nº. 0, 2006, págs. 26-40
• Idioma: inglés
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• Resumen

  • 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 suggest that: (i) labour-market programs can generate significant long-run increases in employment; (ii) 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 (iii) displacement percentages are larger in the short run than in the long run.