YOUTH WAGE SUBSIDY SHOWN TO HAVE 'ZERO EFFECT
Tuesday, 13 January 2015
Matric class faces bleak prospects as government's signature youth employment instrument fails to deliver. Equal Education calls for immediate scrapping of a failing policy
Government's flagship youth employment initiative is a flop. According to a new paper published by researchers at UCT the Employment Tax Incentive (previously termed the Youth Wage Subsidy), which was introduced on 1 January 2014, is a failure. According to their research it "did not have any statistically significant and positive effects on youth employment probabilities".
The stated purpose of the Employment Tax Incentive (ETI) Act is to stimulate youth employment levels and ease the challenges that many youth experience in finding their first jobs.
The Act introduced a tax subsidy, paid by government to businesses, for the first two years of employment of a new employee below 30 years of age. Businesses receive the amount as tax deduction.