An estimate of the equity effects of labour market programs

Abstract

Labour market programs aim to enhance both total employment and equality of job opportunities. While the employment effects have been studied extensively in Australia and overseas, the effects on equality has scarcely received any attention. The existing literature implies that any assistance to a disadvantaged group will promote equality. However, because many programs operate by substituting one group of people for another, the effects on equity cannot be determined until some estimates are made of the type of person who has been displaced. This study attempts to present comparative information on the types of people who benefit and lose from the provision of labour market programs. It is found that expenditure on labour market programs, as they were constructed under Working Nation, favours people with more disadvantaged work histories and lower household incomes compared with an alternative of higher levels of health and education expenditure.