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The impact of policy change on job retention and advancement

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  • Dickins, Richard
  • McKnight, Abigail

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

  • Dickins, Richard & McKnight, Abigail, 2008. "The impact of policy change on job retention and advancement," LSE Research Online Documents on Economics 23984, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:23984
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    File URL: http://eprints.lse.ac.uk/23984/
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    References listed on IDEAS

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    1. 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.
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    3. 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.
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    More about this item

    JEL classification:

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

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