Do wage subsidies provide a stepping-stone to employment for recent college graduates? Evidence from a randomized experiment in Jordan

Matthew Groh, Nandini Krishnan, David McKenzie, Tara Vishwanath

Research output: Contribution to journalArticlepeer-review

26 Scopus citations

Abstract

This study examines the impact of a randomized experiment in Jordan in which female community college graduates were assigned to receive a wage subsidy voucher. The wage voucher led to a 38 percentage point increase in employment in the short run, but the average effect is much smaller and no longer statistically significant after the voucher period has expired. The extra job experience gained as a result of the wage subsidy does not provide a stepping-stone to new jobs for these recent graduates, which appears to be due to productivity levels not rising above a binding minimum wage.

Original languageEnglish (US)
Pages (from-to)488-502
Number of pages15
JournalReview of Economics and Statistics
Volume98
Issue number3
DOIs
StatePublished - Jul 1 2016

ASJC Scopus subject areas

  • Social Sciences (miscellaneous)
  • Economics and Econometrics

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