Download or read book Subsidizing Job Creation in the Great Recession written by Sagiri Kitao and published by DIANE Publishing. This book was released on 2010-10 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: Analyzes the effects of various labor market policies on job creation, job destruction, and employment. The equilibrium model is calibrated to capture labor market conditions at the end of 2009, including the unemployment, inflow, and outflow rates by workers of different educational attainment. The authors consider the equilibrium effects of a hiring subsidy, a payroll tax reduction, and an employment subsidy. They find that a hiring subsidy and a payroll tax deduction, as in the Hiring Incentives to Restore Employment Act, can stimulate job creation in the short term, but can cause a higher equilibrium unemployment rate in the long term. Employment subsidies succeed in lowering the unemploy. rate permanently, but the policy entails high fiscal costs. Illus.