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Labour costs and employment policy

Published online by Cambridge University Press:  26 March 2020

Robert A. Hart  and
Robin J. Ruffell
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Abstract

Under the Government's New Deal proposals to help create jobs for the young unemployed, employers are offered marginal employment subsidies. Such interventions involve relative changes in the firm's fixed and variable labour costs. In turn, cost changes have implications for both employment and hours of work. This study examines possible strengths and weaknesses of employment policies that are designed to price young unemployed into jobs by reducing related labour costs. It focuses on one such intervention, the major restructuring of employers' National Insurance Contributions (NICs) in the 1985 Budget. This is then linked to the New Deal measures.

Type
Articles
Information
National Institute Economic Review , Volume 165 , July 1998 , pp. 99 - 108
Copyright
Copyright © 1998 National Institute of Economic and Social Research

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Footnotes

∗

We are grateful to Dan Hamermesh, Martin Lunnon, Mike Marland and a referee for useful comments. Helpful information was provided by Adrian Gallop, Neil Millward, Jane Mitchinson, Clive Singleton and Ann White. None of these individuals is responsible for views expressed or for errors and misconceptions.

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