The Earned Income Tax Credit (EITC) / Austin Nichols, Jesse Rothstein.

Format:

Book

Author/Creator:

Nichols, Austin.

Contributor:

National Bureau of Economic Research.

Rothstein, Jesse.

Series:

Working Paper Series (National Bureau of Economic Research) no. w21211.

NBER working paper series no. w21211

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Earned Income Tax Credit

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2015.

Summary:

We review research on the Earned Income Tax Credit (EITC), focusing on work appearing since the Hotz and Scholz (2003) review. Recent work has confirmed earlier findings that labor supply effects are positive for single mothers, smaller and negative for married mothers, and essentially nonexistent for men. Where earlier estimates indicated that all responses were on the extensive margin, some recent studies find evidence of non-zero, but small, intensive margin effects. We also review research on the incidence of the credit, suggesting that employers capture some of the program benefits through lower wages; on the large impact of the program on poverty rates and on children's outcomes; and on families' apparent preferences for lump-sum refunds over smaller payments distributed throughout the year. We present new evidence regarding the accuracy of EITC imputations in the Current Population Survey. We discuss proposals for reform, including a more generous childless credit, and argue that the EITC may be complementary to the minimum wage, rather than an alternative.

Notes:

Print version record

May 2015.