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The Work Opportunity and Welfare–to–Work Tax Credits: Participation Rates Among Eligible Workers

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  • Hamersma, Sarah

Abstract

This paper examines participation in the Work Opportunity Tax Credit (WOTC) and the Welfare–to–Work Tax Credit (WtW), two federal employer subsidy programs. I use nationally–representative data to estimate the number of disadvantaged workers whose employers qualified for either of the credits in 1997 or 1999. I compare these estimates to the number of applications approved in each year. Estimated participation in 1999 was less than 17 percent among eligible disadvantaged youth. While participation was higher for welfare recipients, even upper–bound esimates are less than 33 percent. These low participation rates are consistent with those of similar programs in previous years.

Suggested Citation

  • Hamersma, Sarah, 2003. "The Work Opportunity and Welfare–to–Work Tax Credits: Participation Rates Among Eligible Workers," National Tax Journal, National Tax Association;National Tax Journal, vol. 56(4), pages 725-738, December.
    • Handle: RePEc:ntj:journl:v:56:y:2003:i:4:p:725-38
    DOI: 10.17310/ntj.2003.4.01
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    References listed on IDEAS

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    1. John H. Bishop & Suk Kang, 1991. "Applying for entitlements: Employers and the targeted jobs tax credit," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 10(1), pages 24-45.
    2. Timothy J. Bartik, 2001. "Jobs for the Poor: Can Labor Demand Policies Help?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number tjb2001.
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    Cited by:

    1. Alexander Gelber & Adam Isen & Judd B. Kessler, 2014. "The Effects of Youth Employment: Evidence from New York City Summer Youth Employment Program Lotteries," NBER Working Papers 20810, National Bureau of Economic Research, Inc.
    2. Hunt, Priscillia E & Smart, Rosanna, 2020. "Investigation of Employers' Preferences for the Design of Staffing Agency Incentives to Hire Ex-Felons," IZA Discussion Papers 13520, IZA Network @ LISER.
    3. Charles Po-Cheng Huang, 2026. "Screening Workers with Affirmative Action," Papers 2604.00615, arXiv.org.
    4. Olugbenga Ajilore, 2012. "Did the Work Opportunity Tax Credit Cause Subsidized Worker Substitution?," Economic Development Quarterly, , vol. 26(3), pages 231-237, August.
    5. Gunderson, Jill Marie & Hotchkiss, Julie L., 2007. "Job Separation Behavior of WOTC Workers: Results from a Unique Case Study," MPRA Paper 44801, University Library of Munich, Germany.
    6. David Neumark, 2020. "Place‐Based Policies: Can We Do Better Than Enterprise Zones?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 39(3), pages 836-844, June.
    7. David Neumark, 2016. "Policy levers to increase jobs and increase income from work after the Great Recession," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-38, December.
    8. Sarah Hamersma & Carolyn Heinrich, 2008. "Temporary Help Service Firms' Use of Employer Tax Credits: Implications for Disadvantaged Workers' Labor Market Outcomes," Southern Economic Journal, John Wiley & Sons, vol. 74(4), pages 1123-1148, April.

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