The effects of an employer subsidy on employment outcomes: A study of the work opportunity and welfare-to-work tax credits

Research output: Contribution to journalArticle

25 Scopus citations

Abstract

Employer subsidies such as the Work Opportunity Tax Credit (WOTC) and the Welfare-to-Work Tax Credit (WtW) are designed to encourage employment by partially reimbursing employers for wages paid to certain welfare recipients and other disadvantaged workers. In this paper, I examine the effects of these subsidies on employment, wages, and job tenure using unique administrative data from Wisconsin. My ability to precisely identify the subsidy-certified workers allows me to distinguish the effects of program participation from mere eligibility. Using propensity score matching estimation, I find some evidence of short-term improvements in labor market outcomes, but little evidence of sustained benefits.

Original languageEnglish (US)
Pages (from-to)498-520
Number of pages23
JournalJournal of Policy Analysis and Management
Volume27
Issue number3
DOIs
StatePublished - Jun 2008

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Sociology and Political Science
  • Public Administration

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