Public sector’s subsidies to business - suitability valuation of labor market support measures

Abstract

This scientific article explores the growing unemployment rate and its regulation through government’s subsidies to businesses since it is one of the major economic issues countries currently face. The number of various State-run job creating programs is increasing in Lithuania as in many other countries. This is an important factor to all businesses, since labor costs often comprise a large part of company’s expenses. The analysis of the labor costs generally are associated with two aspects – tax burden related to wages is important not only to companies, which try to minimize their expenses, maximize profit and achieve operational effectiveness, but also to public sector, which tries to collect more tax revenues to national budget and different funds. Therefore, the authors of this article identify State-run job creating programs and perform their comparative analysis. The results of the performed analysis show, that plethora of job creating programs exist in Lithuania, the implementation and use conditions of which are provided by different public sector institutions. Therefore, with the help of comparative analysis results, authors present specific recommendations to private sector in respect to effectiveness and impact of public sector’s support.