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The Impact of Policy Change on Job Retention and Advancement

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  • Richard Dickens
  • Abigail McKnight

Abstract

This paper examines the impact of the Working Families Tax Credit (WFTC) on employment retention and advancement. The WFTC, which replaced Family Credit in October 1999, supplemented earnings of low paid workers living in low income families. It was designed to increase the financial incentive for low skilled workers to find and remain in work and in the process boost their family income. It finds evidence that WFTC increased employment retention among male recipients. WFTC does not appear to have increased wage growth compared with Family Credit but there is no evidence that employers were able to use the more generous WFTC to keep wage growth down.

Suggested Citation

  • Richard Dickens & Abigail McKnight, 2008. "The Impact of Policy Change on Job Retention and Advancement," CASE Papers case134, Centre for Analysis of Social Exclusion, LSE.
    • Handle: RePEc:cep:sticas:case134
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    File URL: https://sticerd.lse.ac.uk/dps/case/cp/CASEpaper134.pdf
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    References listed on IDEAS

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    1. Leigh, Andrew, 2007. "Earned Income Tax Credits and Labor Supply: New Evidence From a British Natural Experiment," National Tax Journal, National Tax Association;National Tax Journal, vol. 60(2), pages 205-224, June.
    2. John Hills & Abigail McKnight & Rachel Smithies, 2006. "Tracking Income: How working families incomes vary through the year," CASE Reports casereport32, Centre for Analysis of Social Exclusion, LSE.
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    6. Francesconi, Marco & van der Klaauw, Wilbert, 2004. "The consequences of ‘in-work’ benefit reform in Britain: new evidence from panel data," ISER Working Paper Series 2004-13, Institute for Social and Economic Research.
    7. Hills, John & McKnight, Abigail & Smithies, Rachel, 2006. "Tracking income: how working families' incomes vary through the year," LSE Research Online Documents on Economics 5569, London School of Economics and Political Science, LSE Library.
    8. Richard Dickens & Paul Gregg & Jonathan Wadsworth (ed.), 2003. "The Labour Market Under New Labour," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-59845-4.
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    Cited by:

    1. Hills, John, 2013. "Labour's record on cash transfers, poverty, inequality and the lifecycle 1997 - 2010," LSE Research Online Documents on Economics 58082, London School of Economics and Political Science, LSE Library.
    2. John Hills, 2013. "Labour's Record on Cash Transfers, Poverty, Inequality and the Lifecycle 1997 - 2010," CASE - Social Policy in a Cold Climate Working Paper 05, Centre for Analysis of Social Exclusion, LSE.
    3. John Hills, 2013. "Labour's Record on Cash Transfers, Poverty, Inequality and the Lifecycle 1997 - 2010," CASE Papers case175, Centre for Analysis of Social Exclusion, LSE.
    4. repec:cep:sticas:/175 is not listed on IDEAS

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    More about this item

    Keywords

    labour market; welfare reform; job retention;
    All these keywords.

    JEL classification:

    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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