The impact of wage subsidies on marginalised young people

Summary

Youth Futures Foundation commissioned the Centre for Evidence and Implementation, the Institute for Employment Studies and Monash University to examine the effect of wage subsidies on youth employment outcomes in high-income countries.

Insights were used to inform the wage subsidy programmes section of our Youth Employment Toolkit.

Approach

A rapid evidence assessment was used to examine wage subsidy programmes targeted at unemployed young people:

1. searching the appropriate literature using specified search terms
2. selecting relevant papers based on inclusion and exclusion criteria
3. extracting relevant evidence
4. synthesising and interpreting the evidence

Included studies

Four studies were considered suitable for meta-analysis:

1. New Deal for Young People (UK)
2. Future Jobs Fund (UK)
3. Subsidised employment programmes (Netherlands)
4. Youth Practice (Sweden)

Insights

Findings suggest that programmes using wage subsidies improve
employment outcomes for young people, but do not improve young people’s entry into education.

The ability for wage subsidy programmes to help young people enter employment appears to depend on factors, including the areas in which young people live, young people’s prior work experience, current labour market conditions and whether young people experience challenges when applying for jobs.

Limitations

Findings are based on a small number of studies (four for the
employment outcome and two for the education outcome).