A copy of this work was available on the public web and has been preserved in the Wayback Machine. The capture dates from 2017; you can also visit the original URL.
The file type is
Critics of marginal wage subsidies claim that their inter-firm displacement effects eliminate their employment and fiscal advantages over general wage subsidies. We develop a model in which we show that the contrary is correct. Inter-firm displacement with marginal subsidies forces down prices and raises output and employment more than under general subsidies. Moreover, we show that marginal subsidization is less expensive for the public budget than general subsidies and that it serves as adoi:10.2139/ssrn.943012 fatcat:vpbhxb4cxbhh5dyph2g4wzfbvy