Einstellungsgutscheine: konkrete Ausgestaltung für Deutschland

This paper describes the practical implementation of hiring vouchers in Germany (Kiel Working Paper 1302 "Comparing the Effectiveness of Employment Subsidies" by Alessio Brown, Christian Merkl and Dennis Snower). According to our proposal employers receive vouchers for hiring longterm unemployed, low-ability workers. Thereby, labour costs are reduced for a limited period of time. The size of the vouchers increases with the duration of unemployment as well as with the qualification and decreases with the subsequent employment duration. We exemplify the concept for self-financing hiring vouchers for a broad range of unemployment durations and qualifications. We develop a simple formula to calculate the size of the voucher depending on the new wage, the duration of unemployment and the subsequent employment duration.