Factor subsidies, employment generation and cost per job: a partial equilibrium approach

D Holden, J K Swales

Research output: Contribution to journalArticle

8 Citations (Scopus)

Abstract

Factor subsidies in a perfectly competitive setting are analysed. A very general model is used to derive expressions for the effect of a factor subsidy on the price and quantity of output and the two factor inputs. These expressions are differentiated to generate qualitative results for the impact of changes in the product-demand, production-function, and factor-supply parameters on the subsidy effects. A similar procedure is used to investigate the exchequer cost per job of general labour and capital subsidies in an industry with Cobb — Douglas technology. The analysis is relieved with illustrative simulations in which ‘representative’ parameter values are used.
Original languageEnglish
Pages (from-to)317-338
Number of pages22
JournalEnvironment and Planning A
Volume25
Issue number3
DOIs
Publication statusPublished - Mar 1993

Keywords

  • factor subsidies
  • capital subsidies
  • labour

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