Public Affairs, Public Policy and Public Administration Commons^™

Wage Subsidies As A Labour Market Policy Tool, Lok Sang Ho

Centre for Public Policy Studies : CPPS Working Paper Series

In this paper, the author argues that the wage subsidy is a valuable policy tool in the face of structural changes such as would result from the removal of tariffs, or in the face of a need to assist the disadvantaged or redress distributional inequity. After discussing wage subsidies that target at specific segments of the population, which has the potential to improve both static and dynamic efficiency, the author goes on to discuss and contrast his universal wage subsidy proposal with the negative income tax and the minimum wage legislation, all of which are designed mainly for distributional purposes.