Employment Effects of the Earned Income Tax Credit: Taking the Long View

Schanzenbach, Diane Whitmore; Strain, Michael R.

doi:10.3386/w28041

Cited by 10 publications

(3 citation statements)

References 31 publications

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“…We showed that the declines in public assistance receipt and poverty were not driven by changes in fertility or marriage and that they were at least in part explained by increased labor force attachment in adulthood. We also showed, like many prior studies have shown (e.g., Eissa and Liebman 1996;Meyer and Rosenbaum 2001;Schanzenbach and Strain 2021;Kuka and Shenhav 2020), that childhood EITC exposure is linked with increased work and earnings among the parent generation. Increased resources in childhood likely leads parents to purchase better goods and services that improve children's wellbeing, which in turn impacts adult wellbeing.…”

Section: Contextualizing Effect Sizessupporting

confidence: 88%

The Intergenerational Transmission of Poverty and Public Assistance: Evidence from the Earned Income Tax Credit

McInnis¹,

Michelmore²,

Pilkauskas³

2023

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We would like to thank John Bound and Jacob Bastian for their very insightful comments. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

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Section: Contextualizing Effect Sizessupporting

confidence: 88%

The Intergenerational Transmission of Poverty and Public Assistance: Evidence from the Earned Income Tax Credit

McInnis¹,

Michelmore²,

Pilkauskas³

2023

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“…The extensive empirical findings on the effects of the U.S. EITC are surveyed in articles by Hotz and Scholtz (2003) and Nichols and Rothstein (2016), which are summarized in . Kleven (2019) presents findings that contradict earlier research findings on the EITC, but Whitmore Schanzenbach and Strain (2020) provide findings more supportive of the earlier research. Hasan (2015) estimated small increases in labour-force rates and work hours for single childless participants in the Canadian WITB program.…”

Section: Program Incentivesmentioning

confidence: 46%

Earnings Supplementation for British Columbia: Pros, Cons, and Structure

Kesselman

Petit

2020

SSRN Journal

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This paper provides background on key issues for the reform of earnings supplement (ES) programs in B.C.: motivation, policy history, and structure of existing and potential provisions. ES programs offer benefits that are linked to an individual's earnings, as distinguished from programs that offer cash transfers that are unconditional on work or earnings. Thus, the motivations for the ES benefit structure are related to views about reciprocity, self-respect, and social participation and contribution. As a consequence, ES programs have garnered wide support across the political spectrum. The paper describes the ES benefit structure, its parameters, and its operational aspects. The federal Canada Workers Benefit (CWB) is the only ES program currently available for B.C. residents. Options for reform or enhancement of the CWB for B.C. workers are surveyed and assessed at a qualitative level: cost-free reconfiguration of the CWB, provincial top-ups to the CWB, and the institution of a B.C. scheme funded and operated by the province.

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“…Unlike the minimum wage, it does not come with the cost of reducing low-wage employment. Indeed, it increases employment (Schanzenbach & Strain, 2020).…”

Section: Weighing Benefits and Costs: What Is The Goal?mentioning

confidence: 99%

The Economics of a $15 Federal Minimum Wage by 2025

Reich¹

2021

J Policy Anal Manage

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The federal minimum wage was increased most recently 12 years ago, when it was set at $7.25. Since then, price inflation has translated into a substantial decline in the real value of that $7.25 minimum wage. As the value of the federal minimum wage has declined, many states and cities have stepped in to set their own local minimum wages at levels above $7.25. According to the Economic Policy Institute, 30 states and the District of Columbia now have a minimum wage higher than the federal minimum wage, and 45 localities have adopted minimum wages above their state minimum wage. Earlier this year, the Raise the Wage Act of 2021 was introduced to raise the federal minimum wage, in annual increments, to $15 per hour by June 2025 and then adjust it to increase at the same rate as median hourly wages. So far, the legislation does not have enough support to pass the Senate.In this Point/Counterpoint debate, we address whether it is in the public's interest to gradually increase the minimum wage over five years to $15 per hour, as proposed in the Raise the Wage Act. 1 Michael Strain of the American Enterprise Institute argues that the proposed increase is large enough that it risks generating substantial job losses. Strain acknowledges that the increase in the minimum wage would increase incomes for the working poor, but he believes that the Earned Income Tax Credit could be used to generate similar benefits without incurring the job losses that would result from a higher minimum wage. Michael Reich of the University of California at Berkeley asserts that the magnitude of the proposed minimum wage increase is not unprecedented, and the most careful empirical studies demonstrate that the job losses associated with an increase of this magnitude are likely to be minimal. Those studies show that past minimum wage increases tended to be absorbed through small price increases in the affected industries, with minimal negative effects on employment. ACKNOWLEDGMENTI thank Kevin Kelly of Mathematica for outstanding assistance in organizing this section. 1 In their essays, Michael Strain and Michael Reich base their calculations on different end points for the increase-2026 for Strain and 2025 for Reich. The difference in calculations is not critical to each author's respective policy position.

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Employment Effects of the Earned Income Tax Credit: Taking the Long View

Cited by 10 publications

References 31 publications

The Intergenerational Transmission of Poverty and Public Assistance: Evidence from the Earned Income Tax Credit

The Intergenerational Transmission of Poverty and Public Assistance: Evidence from the Earned Income Tax Credit

Earnings Supplementation for British Columbia: Pros, Cons, and Structure

The Economics of a $15 Federal Minimum Wage by 2025

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