The employment effects of a youth wage subsidy in South Africa

By Amina Ebrahim & Jukka Pirttilä

One dimension not yet examined by previous ETI studies is the labour market outcomes of individuals eligible for ETI jobs. Little is known about the youth who entered jobs supported by the ETI system due to the paucity of data available. What we want to know is how a young person who gets a job, where the employer is eligible for ETI, compares to a similar young person who does not get a job in their employment probabilities and wages. However, potential earnings cannot be observed for the unemployed, not entering ETI jobs, to make the comparison between the two groups. To get around this problem we propose to use predicted earnings instead of actual earnings from the PALMS data.