|General case 1/||More targeted case 2/|
|Unemployment rate, percent||10||30|
|Labor demand elasticity||-0.5||-0.75|
|Wage response to 10 percent subsidy, percent||3||1.5|
|Change in cost to firm after 10 percent subsidy, percent||-7.0||-8.5|
|Employment response to 10 percent subsidy, percent||3.5||6.4|
|Cost of job as multiple of its salary||2.9||1.6|
Example from Cahuc and Zylberberg (2004). Unemployment rate is illustrative. Labor demand elasticity is the midpoint of international estimates.
Parameters adjusted to reflect youth, who have higher unemployment rates and higher labor demand elasticities worldwide.