The Impact of Policy Change on Job Retention and Advancement

27 Pages Posted: 13 May 2009

See all articles by Richard Dickens

Richard Dickens

London School of Economics

Abigail McKnight

CASE, London School of Economics

Date Written: October 2008

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.

JEL Classification: J68

Suggested Citation

Dickens, Richard and McKnight, Abigail, The Impact of Policy Change on Job Retention and Advancement (October 2008). LSE STICERD Research Paper No. CASE134, Available at SSRN: https://ssrn.com/abstract=1401764

Richard Dickens (Contact Author)

London School of Economics ( email )

Houghton Street
London WC2A 2AE
United Kingdom

Abigail McKnight

CASE, London School of Economics ( email )

Houghton Street
London WC2A 2AE
United Kingdom
020 7955 6673 (Phone)