Jump to ContentJump to Main Navigation
Labor Supply and Taxation$
Users without a subscription are not able to see the full content.

Richard Blundell, Andreas Peichl, and Klaus F. Zimmermann

Print publication date: 2016

Print ISBN-13: 9780198749806

Published to Oxford Scholarship Online: June 2016

DOI: 10.1093/acprof:oso/9780198749806.001.0001

Show Summary Details
Page of

PRINTED FROM OXFORD SCHOLARSHIP ONLINE (www.oxfordscholarship.com). (c) Copyright Oxford University Press, 2020. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 29 February 2020

The Labor Market Impact of the Working Families’ Tax Credit

The Labor Market Impact of the Working Families’ Tax Credit

Chapter:
(p.201) 8 The Labor Market Impact of the Working Families’ Tax Credit
Source:
Labor Supply and Taxation
Author(s):

Richard Blundell

Alan Duncan

Julian McCrae

Costas Meghir

Publisher:
Oxford University Press
DOI:10.1093/acprof:oso/9780198749806.003.0009

This chapter analyses the impact of the Working Families Tax Credit (WFTC) on working hours and employment. In 1998, the UK Chancellor, Gordon Brown introduced the Working Families Tax Credit (WFTC) as a replacement for Family Credit (FC), the UK’s main in-work benefit. The structure of WFTC was modelled closely on the FC system, with the exception that WFTC was to be packaged as a refundable tax credit rather than as a welfare benefit. The government claimed that WFTC ‘would improve work incentives, encouraging people without work to seek employment.’ This was to be achieved by boosting the in-work incomes available to families in low-wage jobs with children. The WFTC effectively targets two groups: single parents and married couples with children. The chapter simulates labour supply responses using a discrete behavioural model of household labour supply with controls for fixed and childcare costs, and unobserved heterogeneity.

Keywords:   Working Families Tax Credit, working hours, participation, UK, Family Credit, in-work benefit, refundable tax credit, welfare benefit, household labour supply

Oxford Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us .