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Conventional in-work benefits or tax credits are now well established as a policy instrument for increasing labour supply and tackling poverty. A different sort of in-work credit is one where the payments are time-limited, conditional on previous receipt of welfare, and, perhaps, not means-tested. Such a design is cheaper, and perhaps better targeted, but potentially less effective. Using administrative data, this paper evaluates one such policy for lone parents in the UK which was piloted in around one third of the country. It finds that the policy did increase flows off welfare and into work, and that these positive effects did not diminish after recipients reached the 12 month time-limit for receiving the supplement. Most of the impact arose by speeding up welfare off-flows: the job retention of programme recipients was good, but this cannot be attributed to the programme itself.
Authors
Mike Brewer
Research Fellow University College London
Claire is a Research Fellow at IFS, working on the determinants and consequences of participation in childcare and education for parents and children.
James Browne
Haroon Chowdry
Working Paper details
- DOI
- 10.1920/wp.ifs.2011.1114
- Publisher
- IFS
Suggested citation
Brewer, M et al. (2011). The impact of a time-limited, targeted in-work benefit in the medium-term: an evaluation of In Work Credit. London: IFS. Available at: https://ifs.org.uk/publications/impact-time-limited-targeted-work-benefit-medium-term-evaluation-work-credit (accessed: 19 April 2024).
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