Employment Tax Credits: Evidence From the States
Policy research grant
Employment tax credits (ETC’s) have received much attention as an innovative solution targeted directly at the unemployment problem. Although 24 states have enacted ETC’s, there has been little experience with this policy tool at the national level. This study explores these state-level experiences with ETC’s, examining the policy design, impact of ETC’s on employment in the adopting state, budgetary effects, and whether increases in employment due to ETC’s are temporary or permanent. The study uses panel datasets from the 48 contiguous U.S. states that will contain detailed data describing the design and economic magnitude of ETC’s, as well as data on employment and control variables.