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TJTC and the promise and reality of redistributive vouchering and tax credit policy

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  • Edward C. Lorenz

    (Associate Professor of History and Political Science at Alma College)

Abstract

The Targeted Jobs Tax Credit (TJTC) is a representative redistributive incentive. Initially, proponents saw TJTC as an elegant program, efficiently promoting labor market behavior that would solve the employment problems of many disadvantaged job seekers. However, interest groups distorted the credit into a windfall for businesses that hire large numbers of low wage workers. The policy theories incorporated into TJTC, which emphasized continual program reform and minimized program management by public administrators, provided a setting conducive to interest group distortion. Because few representatives of the disadvantaged participated in the oversight process, special interests undermined TJTC being reformed through empirical evaluation. This experience indicates that without major changes in the policy process, narrowly targeted rzdistributive policies should be avoided.

Suggested Citation

  • Edward C. Lorenz, 1995. "TJTC and the promise and reality of redistributive vouchering and tax credit policy," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 14(2), pages 270-290.
  • Handle: RePEc:wly:jpamgt:v:14:y:1995:i:2:p:270-290 DOI: 10.2307/3325153
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    References listed on IDEAS

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    1. Kevin Hollenbeck & Richard J. Willke, 1991. "The Employment and Earnings Impacts of the Targeted Jobs Tax Credit," Upjohn Working Papers and Journal Articles 91-07, W.E. Upjohn Institute for Employment Research.
    2. repec:mes:challe:v:33:y:1990:i:2:p:59-59 is not listed on IDEAS
    3. repec:cup:apsrev:v:85:y:1991:i:03:p:851-874_17 is not listed on IDEAS
    4. 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.
    5. Linda M. Aguilar & William A. Testa, 1991. "Unemployment insurance: countercyclical or counterproductive?," Chicago Fed Letter, Federal Reserve Bank of Chicago, issue Jul.
    6. Dave M. O'Neill, 1977. "Voucher Funding of Training Programs: Evidence from the GI Bill," Journal of Human Resources, University of Wisconsin Press, vol. 12(4), pages 425-445.
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    Cited by:

    1. Raphael W. Bostic & Allen C. Prohofsky, 2006. "Enterprise Zones and Individual Welfare: A Case Study of California," Journal of Regional Science, Wiley Blackwell, vol. 46(2), pages 175-203.
    2. Christine Ryan & John Wilson & William Fulton, 2003. "The Impact of Urban Growth Boundaries on Future Urbanization," Working Paper 8610, USC Lusk Center for Real Estate.
    3. Maria Figueroa-Armijos & Thomas G. Johnson, 2016. "Entrepreneurship policy and economic growth: Solution or delusion? Evidence from a state initiative," Small Business Economics, Springer, vol. 47(4), pages 1033-1047, December.
    4. Lawrence F. Katz, 1996. "Wage Subsidies for the Disadvantaged," NBER Working Papers 5679, National Bureau of Economic Research, Inc.

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