The Determinants of Take-Up of SYETP Wage Subsidies for Youth

Abstract

The number (i.e. the supply) of young persons eligible for assistance under the SYETP scheme was large in relation to the number actually commencing employment under the scheme, which suggests that supply was unimportant in determining take-up. An alternative explanation of SYETP take-up is that the important factors were those that influenced employers' demand for young workers subsidized under SYETP. These alternative explanations are examined and tested using econometric techniques, and it is found that demand influences alone provide a satisfactory explanation for changes in the number of commencements over the period analysed. These demand-side factors include the proportion of youth wages subsidized under SYETP and the overall level of labour demand in the economy. This finding has a number of policy implications for the programme that recently replaced SYETP, the Jobstart programme, as it means that factors that determined the number of SYETP commencements can be influenced or altered by the Commonwealth government in a systematic manner in order to change the number of commencements.

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