Municipal Variation in Wage Subsidy Use : An empirical study on the use of New Start Jobs in Swedish municipalities

Sammanfattning: Wage subsidies are commonly used as a tool to reduce the cost of labour and lower the rate of unemployment. The purpose of this study is to analyse what factors influence the use of the New Start Jobs subsidy in the two hundred ninety municipalities of Sweden during 2019. The statistical program EViews was used in the analysis to provide insight into the expansive data set. Three key hypotheses were drawn up to explore different influencing factors including, municipal tax rates, share of foreign-born individuals and educational level. The results of this study can be used to further expand the use of this type of wage subsidy with the aim of expanded enrolment into the program and consequently reducing long-term unemployment.