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Earned income tax credit recipients: income, marginal tax rates, wealth, and credit constraints

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  • Kartik B. Athreya
  • Devin Reilly
  • Nicole B. Simpson

Abstract

The Earned Income Tax Credit (EITC) has evolved into the largest anti-poverty program in the United States by providing tax credits for low and moderate income working families. In this paper, we describe the characteristics of EITC recipients at various ages using Current Population Survey data. In addition, we discuss the relevance of the EITC in affecting marginal income tax rates in the United States and discuss the effects of the EITC on household labor supply decisions. Lastly, using data from the Survey of Consumer Finances, we estimate wealth distributions for EITC recipients and analyze the extent to which EITC recipients are credit constrained.

Suggested Citation

  • Kartik B. Athreya & Devin Reilly & Nicole B. Simpson, 2010. "Earned income tax credit recipients: income, marginal tax rates, wealth, and credit constraints," Economic Quarterly, Federal Reserve Bank of Richmond, vol. 96(3Q), pages 229-258.
    • Handle: RePEc:fip:fedreq:y:2010:i:3q:p:229-258:n:v.96no.3
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    Cited by:

    1. Nathaniel G. Hilger, 2016. "Parental Job Loss and Children's Long-Term Outcomes: Evidence from 7 Million Fathers' Layoffs," American Economic Journal: Applied Economics, American Economic Association, vol. 8(3), pages 247-283, July.
    2. Markowitz, Sara & Komro, Kelli A. & Livingston, Melvin D. & Lenhart, Otto & Wagenaar, Alexander C., 2017. "Effects of state-level Earned Income Tax Credit laws in the U.S. on maternal health behaviors and infant health outcomes," Social Science & Medicine, Elsevier, vol. 194(C), pages 67-75.
    3. Simpson, Nicole B., 2013. "Families, Taxes and the Welfare System," IZA Discussion Papers 7369, Institute of Labor Economics (IZA).
    4. Austin Nichols & Jesse Rothstein, 2015. "The Earned Income Tax Credit," NBER Chapters, in: Economics of Means-Tested Transfer Programs in the United States, Volume 1, pages 137-218, National Bureau of Economic Research, Inc.
    5. Carol Osler & Thang Nguyen & Tanseli Savaser, 2011. "Asymmetric Information and the Foreign-Exchange Trades of Global Custody Banks," Department of Economics Working Papers 2011-09, Department of Economics, Williams College.
    6. Otto Lenhart, 2019. "The effects of income on health: new evidence from the Earned Income Tax Credit," Review of Economics of the Household, Springer, vol. 17(2), pages 377-410, June.
    7. Struffolino, Emanuela & Mortelmans, Dimitri, 2018. "Lone Mothers in Belgium: Labor Force Attachment and Risk Factors," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 257-282.
    8. John Schmitt, 2012. "Low-wage Lessons," CEPR Reports and Issue Briefs 2012-03, Center for Economic and Policy Research (CEPR).
    9. Julien Albertini & Arthur Poirier & Anthony Terriau, 2020. "The impact of EITC on education, labor market trajectories, and inequalities," Working Papers halshs-03082382, HAL.

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