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The reduced employer contribution for young people is a proposal that the Center Party has received in negotiations with the government and liberal parties.
But the measure is not effective enough. Lars Calmfors, professor of international economics, and David Seim, associate professor of economics, write about SvD Debatt.
In the discussion article, the researchers refer to an IFAU study from 2013, which showed that reducing the employer contribution for youth in 2007 created between 6,000 and 10,000 new jobs for youth, but that each The job cost between 1 and 1.6 million SEK.
Conclusion: The measure was ineffective.
Reduced employer contribution for youth
The employer contribution for youth will be temporarily reduced from April 1 of next year to March 31, 2023.
It is reduced from 31.42 to 19.76 percent of salary, and is applied to people who at the beginning of the year have turned 18 but not 23 years old.
The investment is estimated to cost around $ 9 billion a year.
The objective is “to counteract the negative consequences of the pandemic for the opportunities of young people in the labor market and, at the same time, make it easier for companies to retain and hire new staff.”
Source: Government
Researchers: Annie Lööf overinterprets
Calmfors and Seim then refer to a recent study and write:
“In a recent study, which one of us (David Seim) co-authored and described in a 2019 SNS Analysis report, Alliance Government rate reductions for youth were re-evaluated. Annie Lööf and the Center have used the report to claim that lower employer contributions for young people are effective in increasing their employment. Unfortunately, the results are over-interpreted. In fact, the study, like the previous one, finds small effects on youth employment ”.
However, according to economists, reducing the employer contribution for young people had a positive effect on companies with many young employees. Therefore, the measure could be seen more as a support for industries that employ many young people, than as a support to get more young people to work, they write in SvD Debatt.
“Many jobs are subsidized”
Calmfors and Seim then continue:
“The basic problem with reduced employer contributions to increase youth employment is that they apply to all young people who work. This subsidizes many jobs that would still exist. That is why the measure becomes so expensive. A better and cheaper method is improved employment support that only subsidizes new hires. “
They conclude by writing that employment support measures must be costly, but that it is important to consider their effectiveness.
