Minnesota's Earned Income Credit Program: Utilization by Current and Former Welfare Households and the Impact of Policy Parameters

Abstract

We examine the utilization of a state earned income credit by current and former welfare recipients using two measures: receipt among all current and former welfare recipients and among only those eligible for the credit. Both measures may be useful, depending upon which groups policymakers hope to target. We further characterize utilization by examining how receipt varies with earnings and by demographic group, the length of time current and former welfare households receive the state earned income credit, and whether recipient households respond to changes in the parameters to state earned income credit programs.