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MEMO To: From: Re: Date: Introduction The long-term unemployed will make state and nation decrease the productivity and increase debt in public system. In response to the chronic unemployment of low and non-skilled workers in state X, the government aims to train them to get back to social and increase the productivity to society. There are two company could take the action for government, one is private sector that offers the on-the-job training program and another one is education program that offered by public sector. Before the government choose the program, it is necessary that State Government to evaluate all the benefits and costs of each program and choose the only one to train chronic unemployment of low and non-skilled…show more content…
The table 5 shows all the information that may influence the decision. In order to perform the analysis, some basic assumptions should be known. The first, I believe that there are some main cost for state, firms and trainees like wage, training cost, leisure time cost and tax. And some main benefits in this case are welfare revenue and productivity. And all these information will change depend different leisure time, discount rate and employee rate. Results The result of table 5 shows with the leisure time and discount rate increase, the net effect of society will decrease because the costs will increase too. And this result also shows that when the leisure time equal to 1.5, the net effect of society in public sector will be greater than private program. But when the leisure time equal to 3, the private program (25% wage subsidy) will be the best choice for government. Policy Recommendation I recommend that the State X need to find out the real leisure time and discount rate before they want to achieve their plan because the difference discount rate and leisure time will influence the result a lot. When the government find out what the real discount rate and leisure time value, we can recalculate and evaluate this plan and the net effects again to decide which sector has greater

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