The U.S. Earned Income Tax Credit, its Effects, and Possible Reforms
AbstractIn this paper, I first summarize how the U.S. Earned Income Tax Credit (EITC) operates and describe the characteristics of recipients. I then discuss empirical work on the effects of the EITC on poverty and income distribution, and its effects on labor supply. Next, I discuss a few policy concerns about the EITC: possible negative effects on hours of work and marriage, and problems of compliance with the tax system. I then briefly discuss some possible reforms to the structure of the current EITC.
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Bibliographic InfoPaper provided by Harris School of Public Policy Studies, University of Chicago in its series Working Papers with number 0720.
Date of creation: Aug 2007
Date of revision:
Other versions of this item:
- Meyer, Bruce D., 2008. "The US earned income tax credit, its effects, and possible reforms," Working Paper Series 2008:14, IFAU - Institute for Evaluation of Labour Market and Education Policy.
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
- J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-05-31 (All new papers)
- NEP-LAB-2008-05-31 (Labour Economics)
- NEP-PBE-2008-05-31 (Public Economics)
- NEP-PUB-2008-05-31 (Public Finance)
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