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Wage Subsidies and Skill Formation: A Study of the Earned Income Tax Credit

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... In October 1999, FC became WFTC and the government estimated twice as many families to be in receipt of WFTC as received by FC. Table 1 how the number of claimants changed from 1988 to 2002 9 . There were 1.1 million claims for WFTC in August 2000, which increased to 1.3 million claims in August 2001. ...
... In addition to this the take-up rate of WFTC by 2002 was estimated to be 72-76% compared to 66-70% under FC. The take-up rate was 9 In April 2003, WFTC changed again to the Working Tax Credit. ...
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This paper proposes a simple general equilibrium model to investigate the impact of an earned income tax credit on the equilibrium gross wage. Under the assumption that the employer has knowledge, or at least awareness, of which of her employees are eligible, she may share in the incidence of the tax credit by cutting the gross wage. Moreover, given the level of substitutability between eligible employees and non-eligible employees, there may be a spill-over eect onto the wages of both eligible and non-eligible workers. The empirical investigation examines the introduction of the Working Families'Tax Credit in the UK in 1999 using a two stage regression-based method and data on women. This paper …nds evidence to suggest that women eligible for the tax credit do face a wage cut relative to those not eligible. The size of the cut depends inversely on how close their actual wage is to the UK's National Minimum Wage but positively on how relevant the WFTC is to the household income and so aecting most severely the claimants in the middle of the wage distribution.
... Further, the pro tability of expensive inventions depends on learning, because production costs depend on the accumulated learning experience. For individuals, past work experience is conducive to increasing worker's discoveries (Altu and Miller, 1998;Cossa et al., 2000). Chang et al. (2002) points out that past work experience helps people accumulate skills. ...
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Using the firm-level data of the Chinese industrial sector from 1998 to 2010, this study investigates the impact of the previous environmental protection experience of prefecture-level Communist Party secretaries on the COD regulation within the secretaries’ respective jurisdictions. The study finds that the secretaries’ previous environmental protection experience has reduced the COD discharge intensity. The duration of the previous environmental protection experience is selected as an instrumental variable and the endogeneity is further addressed; the research conclusion remains unchanged. However, this negative impact only lasts for two years and presents an unclear long-term impact. The negative effect on COD discharge intensity caused by the previous environmental protection experience is affected by the mandatory regulation pressure from the central government and the overall polluting density of the sub-sectors. Secretaries with previous environmental protection experience do not reduce the COD discharge intensity by using the punishment mechanism of increasing sewage charges. The secretaries, instead, encourage enterprises to use clean production technology, save water resources, and reduce the produced COD level. Also, the secretaries place an emphasis on the treatment of wastewater pollutants, thus reducing the COD discharge intensity. The conclusions of this study can provide decision-making reference for the selection and training of local officials, with the goal of environmental regulation.
... This will depend largely on the relative importance of the passive return to work experience, which occurs automatically once in work, in comparison with the return to 'active' human capital investment, which requires effort or time inputs by the individual. Cossa, Heckman and Lochner (1999) make this point forcibly. However, evidence of steep wage progression among low skilled workers is rare. ...
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Alongside the growth in overall employment and the steady rise in average real incomes over the 1990s, the UK experienced a concentration of worklessness and low pay among certain groups in society. This was particularly acute for low-income families with children, but was also reflected in the frequency of spells out of work by the young and by the falling attachment to the labour market of older men. In response, the focus of welfare policy shifted towards "making work pay". The Working Families Tax Credit and the New Deal were central among the policy options that were implemented. This lecture considers the validity of the arguments underlying this shift in welfare policy and, drawing on evidence from the UK and abroad, asks: which policies work and why? It examines two broad classes of policy options that are motivated by the make work pay objective: active labour market programmes that involve wage subsidies together with improved job matching; and earned income tax credits that supplement wages for working low-income families. These programmes have many features in common. They are also similar to many policy reforms in Europe and North America. Using the evaluation of the UK reforms this lecture brings empirical evidence into the debate on the effectiveness of these programmes and assesses which aspects of the design of welfare to work programmes work well and which aspects could be improved.
... Therefore, the government can increase an agent's and Kapicka (2009). Topel (1990), Cossa et al. (1999), Altu˘ g and Miller (1998) provide empirical evidence of LBD. The authors show that past hours worked and length of current job tenure impact current wages. ...
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This paper considers the impact of endogenous human capital accumulation on optimal tax policy in a life cycle model. Including endogenous human capital accumulation, either through learning-by-doing or learning-or-doing, is analytically shown to create a motive for the government to use age-dependent labor income taxes. If the government cannot condition taxes on age, then it is optimal to use a tax on capital in order to mimic such taxes. Quantitatively, introducing learning-by-doing or learning-or-doing increases the optimal tax on capital by forty or four percent, respectively. Overall, the optimal tax on capital is thirty five percent higher in the model with learning-by-doing compared to the model with learning-or-doing implying that how human capital accumulates is of significant importance when determining the optimal tax policy.
... Dans cette perspective, les stratégies d'innovation technologique et d'allégement des charges sur les bas salaires peuvent être antinomiques, car l'allégement sur les bas salaires décourage l'amélioration des qualifications et réduit les capacités d'innovation.L 'impact des allégements de charges sur l'accumulation de connaissances et de savoir-faire En réalité, les allégements de charges ont des conséquences complexes, jouant dans des sens différents sur l'accumulation de connaissances et de savoir-faire. Il apparaît, en effet, que les modifications du profil des rémunérations et des perspectives d'emploi induites par les allégements de charges sur les bas salaires ont les conséquences suivantes (voirCossa et al. [1999], pour une discussion plus approfondie, et l'analysede Granier et Nyssen [1996], qui intègre les comportements d'éducation des travailleurs et d'innovation des entreprises) :Premièrement, il ressort que les rendements des études qui permettent de postuler à des emplois dont le nombre et les Revue française d'économie, n° 3/vol XVII ...
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