Work Opportunity Tax Credit: Employers Do Not Appear to Dismiss Employees toIncrease Tax Credits

摘要

The Work Opportunity Tax Credit (WOTC) is intended to increase the employment andearnings of workers belonging to certain disadvantaged groups by providing employers with an incentive to hire and retain these workers. However, as government and academic analysts have pointed out, the credit may also create incentives for employers to dismiss workers who do not make the employer eligible for the credit. The objectives in this study were to determine (1) the characteristics, including motivations, of the employers who have participated in the credit program and (2) the extent, if any, to which employers have practiced displacement or churning.