Do EITC expansions pay for themselves? Effects on tax revenue and government transfers

Bastian, Jacob; Jones, Maggie R.

doi:10.1016/j.jpubeco.2020.104355

Cited by 36 publications

(37 citation statements)

References 101 publications

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“…(p-values < 0.001) and are largely consistent with previous evidence on how the EITC aects unmarried and married mothers (Eissa and Hoynes, 2006;Bastian and Jones, 2019).…”

Section: Labor Supplysupporting

confidence: 89%

“…The larger increase in time spent playing for married mothers is also consistent with modest negative impacts of the EITC on their labor supply. While we do not nd a negative eect on the average labor supply of married mothers, we do nd a decrease among younger married mothers in Section 5.7, lining up with previous studies (Eissa and Hoynes, 2004;Bastian and Jones, 2019). a larger impact on weekday relative to weekend time use.…”

Section: Eitc Eects On the Distribution Of Time Usesupporting

confidence: 72%

“…We begin by estimating impacts of the EITC on mother's labor supply over the 2003 2018 period, noting that most previous research examines earlier expansions (especially the major expansion from 1993 to 1996). There is some disagreement on the impacts of EITC expansions after the mid-1990s, with Bastian and Michelmore (2018) and Bastian and Jones (2019) estimating moderate positive eects (consistent with the previous literature) and Kleven (2019) nding more modest eects of the 2009 federal expansion and no eects of state expansions. Our approach is more similar to that taken by Bastian and Michelmore (2018) and Bastian and Jones (2019), 6 reaching similar conclusions: expansions of the EITC since 2003 have led to increased labor force participation, time spent working, and earnings among unmarried mothers.…”

supporting

confidence: 74%

“…There is some disagreement on the impacts of EITC expansions after the mid-1990s, with Bastian and Michelmore (2018) and Bastian and Jones (2019) estimating moderate positive eects (consistent with the previous literature) and Kleven (2019) nding more modest eects of the 2009 federal expansion and no eects of state expansions. Our approach is more similar to that taken by Bastian and Michelmore (2018) and Bastian and Jones (2019), 6 reaching similar conclusions: expansions of the EITC since 2003 have led to increased labor force participation, time spent working, and earnings among unmarried mothers. We also nd suggestive evidence that federal EITC expansions had larger eects on labor supplyand on other categories of time usethan state EITC expansions.…”

supporting

confidence: 74%

See 3 more Smart Citations

The Earned Income Tax Credit and Maternal Time Use: More Time Working and Less Time with Kids?

Bastian¹,

Lochner²

2022

Journal of Labor Economics

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Parents spend considerable time and resources investing in their children's development. Given evidence that the Earned Income Tax Credit (EITC) aects maternal labor supply, we investigate how the EITC aects a broad array of time-use activities, focusing on the amount and nature of time spent with children. Using 2003-2018 time-use data, we nd that federal and state EITC expansions increase maternal work time, which reduces time devoted to home production, leisure, and time with children. However, for children of all ages, almost none of the reduction comes from time devoted to investment activities, such as active learning and development activities.

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“…(p-values < 0.001) and are largely consistent with previous evidence on how the EITC aects unmarried and married mothers (Eissa and Hoynes, 2006;Bastian and Jones, 2019).…”

Section: Labor Supplysupporting

confidence: 89%

Section: Eitc Eects On the Distribution Of Time Usesupporting

confidence: 72%

supporting

confidence: 74%

supporting

confidence: 74%

See 2 more Smart Citations

The Earned Income Tax Credit and Maternal Time Use: More Time Working and Less Time with Kids?

Bastian¹,

Lochner²

2022

Journal of Labor Economics

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“…Given the potential benefits to society in light of the immense costs of violent crime, the findings suggest a very high marginal value of the public funds, which is in line with evidence by Bastian and Jones (2018) who show that the EITC has largely paid for itself. To further improve our understanding of the relationship between EITC and crime, future research should examine the role of potential mechanisms, such as employment changes, financial security, relative poverty, opportunity costs, mental health, and within‐household domestic violence.…”

Section: Discussionsupporting

confidence: 87%

Earned income tax credit and crime

Lenhart

2021

Contemporary Economic Policy

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This study examines the relationship between earned income tax credit (EITC) laws and crime. Using data from 1999–2017, a period with 73 state EITC changes, I evaluate the effects of state‐level EITCs on violent and property crime. Estimating difference‐in‐differences models, I find that higher EITCs are associated with significant reductions in violent crime, while not affecting property crimes. Introducing high state EITC is associated with a 10.0% reduction in violent crimes, which corresponds to 40 fewer crimes per 100,000 individuals. Event study estimates confirm the negative association between EITC generosity and violent crime.

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Quasi‐experimental evidence on the employment effects of the 2021 fully refundable monthly child tax credit

Pac,

Berger

2023

J Policy Anal Manage

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In this paper, we estimate the impact on employment of the 2021 Child Tax Credit (CTC) expansion, which increased the size of the benefit, made it fully refundable, and allowed for monthly receipt. We harness exogenous variation in monthly CTC eligibility by comparing employment among caregivers to that of childless workers before and after monthly payments commenced on July 15, 2021, using event study and difference‐in‐differences frameworks. Our preferred estimates suggest that monthly CTC payments were, at most, associated with a relatively small decline in employment among caregivers. Our primary difference‐in‐differences estimates indicate a statistically nonsignificant decline in employment of approximately 344,000 to 495,000 caregivers relative to childless adults. Our treatment intensity estimates suggest an increase in employment among caregivers with two or more children relative to those with one child. Our findings contribute to the cost‐benefit calculus of the current debate over whether to establish a permanent fully refundable monthly CTC.

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Do EITC expansions pay for themselves? Effects on tax revenue and government transfers

Cited by 36 publications

References 101 publications

The Earned Income Tax Credit and Maternal Time Use: More Time Working and Less Time with Kids?

The Earned Income Tax Credit and Maternal Time Use: More Time Working and Less Time with Kids?

Earned income tax credit and crime

Quasi‐experimental evidence on the employment effects of the 2021 fully refundable monthly child tax credit

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