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Does the Targeted Jobs Tax Credit Create Jobs at Subsidized Firms?

John H. Bishop, Cornell University
Mark Montgomery, Grinnell College

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Suggested Citation
Bishop, J. H., & Montgomery, M. (1991). Does the targeted jobs tax credit create jobs at subsidized firms? (CAHRS Working Paper #91-25). Ithaca, NY: Cornell University, School of Industrial and Labor Relations, Center for Advanced Human Resource Studies.
http://digitalcommons.ilr.cornell.edu/cahrswp/357

Abstract

This paper uses the results of a survey of more than 3500 private employers to determine whether use of the Targeted Jobs Tax Credit (TJTC) alters the level of a fIrm's employment and/or whom the fInn hires. We estimate that each subsidized hire generates between .13 and .3 new jobs at a participating fIrm. Use of the program also appears to induce employers to hire more young workers (age 25 and under). Our results suggest, however, that at least 70% of the tax credits granted employers are payments for workers who would have been hired even without the subsidy. Such payments represent mere transfers to employers.

Suggested Citation

John H. Bishop and Mark Montgomery. "Does the Targeted Jobs Tax Credit Create Jobs at Subsidized Firms?" 1991
Available at: http://works.bepress.com/john_bishop/69