This paper explores the optimal design of subsidies for hiring unemployed workers (“employment vouchers” for short) in the context of a dynamic model of the labor market. Focusing on the short-term and long-term effects of the vouchers on employment...

The paper explores the employment implications of allowing people the opportunity of using a portion of their incapacity benefits to provide employment vouchers for employers that hire them. The analysis indicates that introducing this policy could...

The paper examines the relative effectiveness of two policy proposals in reducing unemployment and working poverty: hiring subsidies and wage subsidies. The hiring subsidies are targeted exclusively at the unemployed and are provided only for a...

The analysis provides a new explanation for two widespread problems concerning European unemployment policy: the disappointingly small effect of many past reform measures on unemployment; and the political difficulties in implementing more extensive...