Andrew Leigh (Economics Program, Research School of Social Sciences, The Australian National University) Roger Wilkins () (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)
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Over recent years, several developed countries have implemented earned income tax credits in order to encourage welfare recipients to move into work. Here, we investigate the impact of ‘Working Credits', which increased the incentives for welfare recipients to work, but only for a temporary period. Using differences-in-differences and regression-adjusted differences-in-differences, we find evidence that the introduction of the Working Credit increased employment rates, earnings and exits for those on income support. Results from matched differences-in-differences are less precise, but generally consistent with the other two empirical strategies. Back-of-the-envelope estimates suggest that on a cost-per-job basis, the Working Credit compares favourably with existing labour market programs.
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Paper provided by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number
wp2009n07.
Length: 36 pages Date of creation: Mar 2009 Date of revision: Handle: RePEc:iae:iaewps:wp2009n07
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
V. Joseph Hotz, 2003.
"The Earned Income Tax Credit,"
NBER Chapters,
in: Means-Tested Transfer Programs in the United States, pages 141-198
National Bureau of Economic Research, Inc.
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