In: Economics
3. The Targeted Jobs Tax Credit existed from 1979 through 1994
and offered employers a tax credit for each less-skilled worker
they employed. Assume that the tax credit was fixed at $3 per hour
worked by a less-skilled worker.
How would this tax credit have affected the demand curve for
less-skilled workers? What are the predicted effects on wages and
employment? Use a graph to illustrate your answer.