Wage subsidies as a labour market policy tool

In this paper, the author argues that wage subsidy is a valuable policy too l in the face of structural changes such as would result from the removal o f tariffs, or in the face of a need to assist the disadvantaged or redress distributional inequity. After discussing wage subsidies that target specif ic segments of the population, which has the potential to improve both stat ic and dynamic efficiency, the author goes on to discuss and contrast his u niversal wage subsidy proposal with the negative income tax and the minimum wage legislation, all of which are designed mainly for distributional purp oses.