Working Credits: A Low-Cost Alternative to Earned Income Tax Credits?
AbstractOver 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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper 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:
Contact details of provider:
Postal: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Victoria 3010 Australia
Phone: +61 3 8344 2100
Fax: +61 3 8344 2111
Web page: http://www.melbourneinstitute.com/
More information through EDIRC
This paper has been announced in the following NEP Reports:
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.:
- Marco Francesconi & Wilbert van der Klaauw, 2007. "The Socioeconomic Consequences of "In-Work" Benefit Reform for British Lone Mothers," Journal of Human Resources, University of Wisconsin Press, vol. 42(1).
- James Banks & R Disney & Alan Duncan & John Van Reenen, 2004.
"The Internationalisation of Public Welfare Policy,"
CEP Discussion Papers
dp0656, Centre for Economic Performance, LSE.
- Brewer, M. & Duncan, A. & Shephard, A. & Suarez, M.J., 2003. "Did Working Families' Tax Credit work? Analysing the impact of in-work support on labour supply and programme participation," Open Access publications from University College London http://discovery.ucl.ac.u, University College London.
- Richard Blundell & Alan Duncan & Julian McCrae & Costas Meghir, 2000. "The labour market impact of the working families’ tax credit," Fiscal Studies, Institute for Fiscal Studies, vol. 21(1), pages 75-103, March.
- Edwin Leuven & Barbara Sianesi, 2003. "PSMATCH2: Stata module to perform full Mahalanobis and propensity score matching, common support graphing, and covariate imbalance testing," Statistical Software Components S432001, Boston College Department of Economics, revised 12 Feb 2014.
- V. Joseph Hotz & John Karl Scholz, 2001.
"The Earned Income Tax Credit,"
NBER Working Papers
8078, National Bureau of Economic Research, Inc.
- Brewer, Mike & Duncan, Alan & Shephard, Andrew & Suarez, Maria Jose, 2006. "Did working families' tax credit work? The impact of in-work support on labour supply in Great Britain," Labour Economics, Elsevier, vol. 13(6), pages 699-720, December.
- Leigh, Andrew, 2007. "Earned Income Tax Credits and Labor Supply: New Evidence from a British Natural Experiment," National Tax Journal, National Tax Association, vol. 60(2), pages 205-24, June Cita.
- Saul D. Hoffman & Laurence S. Seidman, 2003. "Helping Working Families: The Earned Income Tax Credit," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number hwf, October.
- Paul Gregg & Susan Harkness, 2003. "Welfare Reform and Lone Parents Employment in the UK," The Centre for Market and Public Organisation 03/072, Department of Economics, University of Bristol, UK.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jenny Chen).
If references are entirely missing, you can add them using this form.