|
The Impact of Tax Credits on Mothers' Employment
The Impact of Tax Credits on Mothers' Employment
This study reviews the impact of Child Tax Credit and Working Tax Credit
on working mothers.
April 2003 saw the introduction of two new tax credits, Child Tax Credit and
Working Tax Credit. Although working in different ways, these were both
intended to support families with children, reduce child poverty, and make
work pay for those on low incomes. They are a central plank of the Labour
Government’s ambitious policy of reducing and eventually abolishing child
poverty.
This report:
- investigates the impact of the tax credits on the participation of women with
children in the labour market;
- explores why those eligible to receive these credits do not always take them
up;
- assesses whether the credits act as an incentive for mothers to reduce their
working hours, and
- reviews the policy implications of the findings.
The study used data from the three latest available rounds of interviews of
the longitudinal Families and Children Study (FACS), 2002/03–2004/05. The
methodology also has lessons for those interested in pinpointing the most
appropriate way of modelling the impact of the new tax credits.
top
|
(323kb)