JobKeeper: The efficacy of Australia’s first short-time wage subsidy

JournalAustralian Journal of Labour Economics
AuthorsRebecca Cassells, Alan Duncan
PublishedSeptember 2020
PublisherThe Centre for Labour Market Research
Number of Pages99-128

The Australian JobKeeper wage subsidy is an unprecedented public policy response to a once in a century health and economic crisis induced by the COVID-19 pandemic. The focus of this paper is on the efficacy of the Australian JobKeeper program design, including how well it meets its overall objective of retaining employer-employee matches; how well it is targeted relative to the needs of both businesses and workers; and the adequacy of JobKeeper as a wage replacement scheme. We consider both the original JobKeeper design, JobKeeper 2.0 and a series of alternative wage subsidy designs that we believe would more effectively target both employers and workers, incentivise a reallocation of labour and support a faster economic recovery.