Evaluation of the Australian Wage Subsidy Special Youth ...

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was carried out. In this respect, they found that women appeared to consistently have had
gains, while there were no youth gains and for men there was great variation and
uncertainty of the presence of gains.
Heckman, Lalonde and Smith (1999) noted that the major evaluations in the US have
often focused on earnings rather than employment gains from programs. They concluded
that the evidence from both the North American and European studies indicated only a
modest gain in the probability of employment. However, it was found that many nonexperimental
evaluations were lacking in their exploration of methodological issues, such
as the appropriate choice of evaluation method. For both Friedlander et al. (1997) and
Heckman et al. (1999) the overview encompassed an immense variety of programs, time
periods and methods. As a result the conclusions are not specific, but instead they provide
an impression of the uncertainty that still remains as to the empirical effectiveness of
programs in achieving gains.
Fay (1996) conducted a review of OECD active labour market program evidence,
including wage subsidies to the private sector. Subsidies were concluded to be useful for
long-term unemployed or women re-entrants, with this drawn mostly from the US JTPA-
II-A experimental evidence. It was found impossible to harmonise the results for the
different outcome measures and means of achieving the evaluations and it was
commented that robust evaluation results were scarce. In particular they recommended it
was important to make non-experimental evaluations more rigorous, and consideration
made to testing alternative model specifications, together with greater data collection
(Fay (1996): 33).
Marx (2001) reviews targeted employment/wage subsidies, for OECD countries mostly
in Europe but also Australia. The conclusion is that little evidence exists for a beneficial
effect on employment prospects, with a variety of negative impacts, limited impact size,
and some few positive results.