eated for people largely locked out of the labour market(Burns, 2010; Schussler 2012).
Training is of course a vital component that must accompany the work experience of young people so that their productivity is enhanced and that they may remain in the employ of the company (or become re-employable) even when the subsidy expires (Burns, 2010; Schussler, 2012; Blumenfeld, 2012).
It is worth noting the pitfalls to a youth wage subsidy for the sake of a balanced argument. Employment gains can come at the expense of other workers who are effectively substituted in favour of those that are attached to a subsidy (Burns, 2010; Schussler, 2012; Blumenfeld, 2012). The ‘churning effect’ is also dangerous where a recycling of workers from one employment period to the next, in the absence of proper monitoring. The financing of a wage subsidy programme has obvious implications for the national budget. Additional revenue is likely to create additional taxation. Lastly, imperfect market conditions can undermine the impact of a youth wage subsidy. For example; a dominating firm in a particular industry may be able to capture some of the subsidy as rent. Where competitiveness is weak in a given industry, the wage subsidy incentive is also weakened (Burns, 2010; Schussler, 2012; Blumenfeld, 2012).

What is clear is that for a youth wage subsidy to be effective, careful consideration must be given to policy design and implementation. Whether the subsidization of wages will be a strong enough incentive for employers to take on workers that do not have the skills set required for their business remains a debatable point. At the very least a youth wage subsidy will allow young people that fall beneath the minimum skill bar an opportunity to be absorbed into the labour force.
8.4.1 Youth-focused exemptions: Active Labour Market Policies
Bell & Blanchflower (2010) propose that South Africa look to the Scandinavian countries as an alternative example where broad labour market deregulation is considered a politically impossible or unpopular move. Instead, more targeted interventions known as Active Labour Market Policies (ALMPs), can be adopted. ALMPs attempt to lower barriers to entry into the labour market. In South Africa the youth wage subsidy is but one example that could fall under ALMPs interventions, but this can be expanded to include exemption from labour market regulations, subsidies and/or credits to support young people to fund their job search, leveraging a development finance solution.