Advanced Search
MyIDEAS: Login to save this article or follow this journal

State Earned Income Tax Credits And Participation In Regular And Informal Work

Contents:

Author Info

  • Gunter, Samara
Registered author(s):

    Abstract

    This paper examines how low-income single parents alter their regular and informal labor supply in response to the earned income tax credit (EITC). Variation in state EITCs from 1997–2005 identifies changes in informal and regular labor supply of unmarried low-income parents in response to tax credits. The informal-sector participation of single fathers declines by 7.3 percentage points, conditional on working in the regular sector, if a state EITC increases by 10 percent of the federal credit. Regular-sector hours worked per week increase by 4.5 hours and informal sector hours per week fall by 2.2 hours with no significant effect on total hours.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.ntanet.org/NTJ/66/1/ntj-v66n01p33-62-state-earned-income-tax.pdf
    Download Restriction: no

    File URL: http://www.ntanet.org/NTJ/66/1/ntj-v66n01p33-62-state-earned-income-tax.html
    Download Restriction: no

    Bibliographic Info

    Article provided by National Tax Association in its journal National Tax Journal.

    Volume (Year): 66 (2013)
    Issue (Month): 1 (March)
    Pages: 33-62

    as in new window
    Handle: RePEc:ntj:journl:v:66:y:2013:i:1:p:33-62

    Contact details of provider:
    Postal: 725 15th St. NW #600. Washington, D.C. 20005-2109
    Phone: (202)737-3325
    Fax: (202) 737-7308
    Email:
    Web page: http://www.ntanet.org/
    More information through EDIRC

    Related research

    Keywords:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Emmanuel Saez, 1999. "Do Taxpayers Bunch at Kink Points?," NBER Working Papers 7366, National Bureau of Economic Research, Inc.
    2. Daniel Feenberg & Elisabeth Coutts, 1993. "An introduction to the TAXSIM model," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 12(1), pages 189-194.
    3. Raj Chetty & Emmanuel Saez, 2009. "Teaching the Tax Code: Earnings Responses to an Experiment with EITC Recipients," NBER Working Papers 14836, National Bureau of Economic Research, Inc.
    4. Nada Eissa & Hilary Hoynes, 2008. "Redistribution and Tax Expenditures: The Earned Income Tax Credit," NBER Working Papers 14307, National Bureau of Economic Research, Inc.
    5. Lacroix, Guy & Fortin, Bernard, 1992. "Utility-Based Estimation of Labour Supply Functions in the Regular and Irregular Sectors," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 102(415), pages 1407-22, November.
    6. Nada Eissa & Jeffrey B. Liebman, 1995. "Labor Supply Response to the Earned Income Tax Credit," NBER Working Papers 5158, National Bureau of Economic Research, Inc.
    7. Eissa, Nada & Hoynes, Hilary Williamson, 2004. "Taxes and the labor market participation of married couples: the earned income tax credit," Journal of Public Economics, Elsevier, Elsevier, vol. 88(9-10), pages 1931-1958, August.
    8. James Alm, 2012. "Measuring, explaining, and controlling tax evasion: lessons from theory, experiments, and field studies," International Tax and Public Finance, Springer, Springer, vol. 19(1), pages 54-77, February.
    9. McCubbin, Janet, 2000. "EITC Noncompliance: The Determinants of the Misreporting of Children," National Tax Journal, National Tax Association, National Tax Association, vol. 53(n. 4), pages 1135-64, December.
    10. Joel Slemrod, 1992. "Do Taxes Matter? Lessons From the 1980s," NBER Working Papers 4008, National Bureau of Economic Research, Inc.
    11. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, Econometric Society, vol. 39(5), pages 829-44, September.
    12. Alan J. Auerbach & Joel Slemrod, 1997. "The Economic Effects of the Tax Reform Act of 1986," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 35(2), pages 589-632, June.
    13. Maria Cancian & Arik Levinson, 2005. "Labor Supply Effects of the Earned Income Tax Credit: Evidence from Wisconsin Supplemental Benefit for Families with Three Children," NBER Working Papers 11454, National Bureau of Economic Research, Inc.
    14. Sandmo, Agnar, 1981. "Income tax evasion, labour supply, and the equity--efficiency tradeoff," Journal of Public Economics, Elsevier, Elsevier, vol. 16(3), pages 265-288, December.
    15. Joel Slemrod, 2007. "Cheating Ourselves: The Economics of Tax Evasion," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 21(1), pages 25-48, Winter.
    16. Dominik H. Enste & Friedrich Schneider, 2000. "Shadow Economies: Size, Causes, and Consequences," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 38(1), pages 77-114, March.
    17. Jeffrey Grogger, 2003. "The Effects of Time Limits, the EITC, and Other Policy Changes on Welfare Use, Work, and Income among Female-Headed Families," The Review of Economics and Statistics, MIT Press, vol. 85(2), pages 394-408, May.
    18. Bruce D. Meyer & Dan T. Rosenbaum, 2000. "Making Single Mothers Work: Recent Tax and Welfare Policy and its Effects," NBER Working Papers 7491, National Bureau of Economic Research, Inc.
    19. V. Joseph Hotz & John Karl Scholz, 2006. "Examining the Effect of the Earned Income Tax Credit on the Labor Market Participation of Families on Welfare," NBER Working Papers 11968, National Bureau of Economic Research, Inc.
    20. James P. Ziliak, 2007. "Making Work Pay: Changes in Effective Tax Rates and Guarantees in U.S. Transfer Programs, 1983–2002," Journal of Human Resources, University of Wisconsin Press, University of Wisconsin Press, vol. 42(3).
    21. Andreas Buehn & Friedrich Schneider, 2012. "Shadow economies around the world: novel insights, accepted knowledge, and new estimates," International Tax and Public Finance, Springer, Springer, vol. 19(1), pages 139-171, February.
    22. Roberto Dell'Anno & Offiong Helen Solomon, 2008. "Shadow economy and unemployment rate in USA: is there a structural relationship? An empirical analysis," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 40(19), pages 2537-2555.
    23. Clotfelter, Charles T, 1983. "Tax Evasion and Tax Rates: An Analysis of Individual Returns," The Review of Economics and Statistics, MIT Press, vol. 65(3), pages 363-73, August.
    24. Cowell, Frank A., 1985. "Tax evasion with labour income," Journal of Public Economics, Elsevier, Elsevier, vol. 26(1), pages 19-34, February.
    25. LaLumia, Sara, 2009. "The Earned Income Tax Credit and Reported Self-Employment Income," National Tax Journal, National Tax Association, National Tax Association, vol. 62(2), pages 191-217, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Bergolo, Marcelo & Cruces, Guillermo, 2014. "Work and Tax Evasion Incentive Effects of Social Insurance Programs: Evidence from an Employment-Based Benefit Extension," IZA Discussion Papers 8198, Institute for the Study of Labor (IZA).

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:ntj:journl:v:66:y:2013:i:1:p:33-62. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Charmaine Wright).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.