| Abstract: | This paper examines the costs of job creation under a wide range of programs that the government has at its disposal. The framework chosen for the analysis is a standard neo-classical model which allows for pockets of unemployment (created by structural imperfections in the operation of the labor market) but not cyclical unemployment. A general conclusion that emerges from the analysis is that job creation programs which are tightly targeted at disadvantaged workers (the structurally unemployed) are much less costly methods of creating additional employment than are untargeted programs. |
