From PPIC:

Offering employers subsidies to hire recently unemployed workers can spur job creation and help the state recover from the recession. But in the long term, subsidies to workers to enter the job market—in the form of a state Earned Income Tax Credit (EITC)—are likely to be more effective at countering the state’s persistently high unemployment rate. These are the key findings in a report released today by the Public Policy Institute of California (PPIC)...In the report, author David Neumark examines the use of hiring credits and worker subsidies, analyzes their impact, and proposes ways to make these tools more effective. He cautions that the state’s current budget problems limit any short-term response, and the recession has been so severe that even the best policy will lead only to modest changes. These concerns make it important for the state to plan for a time when its finances are better, but before the next recession hits—as it inevitably will, says Neumark, a PPIC Bren Fellow and professor of economics at UC Irvine.

For the full study, please visit http://www.ppic.org/main/pressrelease.asp?p=1086.