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Temporary Help Service Firms' Use of Employer Tax Credits: Implications for Disadvantaged Workers' Labor Market Outcomes

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Author Info

  • Sarah Hamersma

    (University of Florida)

  • Carolyn Heinrich

    (University of Wisconsin-Madison)

Abstract

Temporary help services (THS) firms are increasing their hiring of disadvantaged individuals and claiming more subsidies for doing so. Do these subsidies—the Work Opportunity Tax Credit (WOTC) and Welfare-to-Work Tax Credit (WtW)—create incentives that improve employment outcomes for THS workers? We examine the distinct effects of THS employment and WOTC/WtW subsidies using administrative and survey data. Results indicate that WOTC/WtW-certified THS workers have higher earnings than WOTC-eligible but uncertified THS workers. However, these workers have shorter job tenure and lower earnings than WOTC/WtW-certified workers in non-THS industries. Panel estimates suggest that these effects do not persist over time.

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Bibliographic Info

Paper provided by W.E. Upjohn Institute for Employment Research in its series Upjohn Working Papers and Journal Articles with number 07-135.

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Date of creation: Feb 2007
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Handle: RePEc:upj:weupjo:07-135

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Keywords: temporary help; disadvantaged; welfare; welfare-to-work; tax credit; Hamersma; Heinrich;

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References

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Cited by:
  1. Jahn, Elke J. & Rosholm, Michael, 2010. "Looking Beyond the Bridge: How Temporary Agency Employment Affects Labor Market Outcomes," IZA Discussion Papers 4973, Institute for the Study of Labor (IZA).
  2. Hamersma, Sarah & Heinrich, Carolyn J. & Mueser, Peter R., 2012. "Temporary Help Work: Compensating Differentials and Multiple Job-Holding," IZA Discussion Papers 6759, Institute for the Study of Labor (IZA).

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