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Abstract for:

The Impact of Policy Change on Job Retention and Advancement

Richard Dickens,  Abigail McKnight,  October 2008
Paper No' CASE/134: Full paper (pdf)
Tags: employment and income; employment and the labour market; tax, benefits and pensions; welfare benefits and policy; poverty, exclusion and equalities; poverty and social exclusion; labour market; welfare reform; job retention

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.