A study used a unique data set to evaluate the effect of Targeted Jobs Tax Credit (TJTC) on the labor market outcomes of program participants--more than 29,000 individuals for whom Pennsylvania businesses sought tax credits during 1988-94 (final sample was 17,388). Firm-level data were combined with wage data obtained from administrative quarterly wage records of the Pennsylvania Department of Labor and Industry. Earnings and labor market tenure of two groups of workers eligible for TJTC were examined: workers who applied for and were certified by the government as eligible for the TJTC and workers who applied for but were disqualified from the program because of paperwork or other application problems. TJTC participation led to substantial earnings gains for eligible female workers. Certified workers aged 23-26 earned 18-28 percent more per quarter than comparable uncertified workers. The cumulative income gains to TJTC participants exceeded the $2,400 maximum tax credit granted to employers. Certified workers were more likely to be employed than their uncertified counterparts. Greater on-the-job experience attributable to TJTC subsidized employment explained at least part of the earnings differential. The earnings differential persisted during 1995 and 1996 after expiration of the TJTC program in 1994. (Appendixes contain 9 references and 21 endnotes.) (YLB)