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The Earned Income Tax Credit, Health, and Happiness

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  • Boyd-Swan, Casey

    ()
    (Arizona State University)

  • Herbst, Chris M.

    ()
    (Arizona State University)

  • Ifcher, John

    ()
    (Santa Clara University)

  • Zarghamee, Homa

    ()
    (Barnard College)

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    Abstract

    This paper contributes to the small but growing literature evaluating the health effects of the Earned Income Tax Credit (EITC). In particular, we use data from the National Survey of Families and Households to study the impact of the 1990 federal EITC expansion on several outcomes related to mental health and subjective well-being. The identification strategy relies on a difference-in-differences framework to estimate intent-to-treat effects for the post-reform period. Our results suggest that the 1990 EITC reform generated sizeable health benefits for low-skilled mothers. Such women experienced lower depression symptomatology, an increase in self-reported happiness, and improved self-efficacy relative to their childless counterparts. Consistent with previous work, we find that married mothers captured most of the health benefits, with unmarried mothers' health changing very little following the 1990 EITC reform.

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    Bibliographic Info

    Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7261.

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    Length: 43 pages
    Date of creation: Mar 2013
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    Handle: RePEc:iza:izadps:dp7261

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    Related research

    Keywords: Earned Income Tax Credit (EITC); happiness; health; subjective well-being;

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    References

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    1. Ruhm, Christopher J., 2003. "Good times make you sick," Journal of Health Economics, Elsevier, Elsevier, vol. 22(4), pages 637-658, July.
    2. Bruce D. Meyer & Dan T. Rosenbaum, 1998. "Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers," JCPR Working Papers, Northwestern University/University of Chicago Joint Center for Poverty Research 32, Northwestern University/University of Chicago Joint Center for Poverty Research.
    3. Adam Looney, 2005. "The effects of welfare reform and related policies on single mothers' welfare use and employment," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 2005-45, Board of Governors of the Federal Reserve System (U.S.).
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    11. Gordon B. Dahl & Lance Lochner, 2010. "The Impact of Family Income on Child Achievement: Evidence from the Earned Income Tax Credit," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers, University of Western Ontario, CIBC Centre for Human Capital and Productivity 20105, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
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    19. David Neumark & William Wascher, 2000. "Using the EITC to Help Poor Families: New Evidence and a Comparision with the Minimum Wage," NBER Working Papers 7599, National Bureau of Economic Research, Inc.
    20. Hilary W. Hoynes & Douglas L. Miller & David Simon, 2012. "Income, the Earned Income Tax Credit, and Infant Health," NBER Working Papers 18206, National Bureau of Economic Research, Inc.
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    24. Barrow, Lisa & McGranahan, Leslie, 2000. "The Effects of the Earned Income Credit on the Seasonality of Household Expenditures," National Tax Journal, National Tax Association, vol. 53(n. 4), pages 1211-44, December.
    25. Chris Herbst, 2010. "The labor supply effects of child care costs and wages in the presence of subsidies and the earned income tax credit," Review of Economics of the Household, Springer, Springer, vol. 8(2), pages 199-230, June.
    26. Reagan Baughman & Stacy Dickert-Conlin, 2009. "The earned income tax credit and fertility," Journal of Population Economics, Springer, Springer, vol. 22(3), pages 537-563, July.
    27. Chris Herbst, 2011. "The Impact of the Earned Income Tax Credit on Marriage and Divorce: Evidence from Flow Data," Population Research and Policy Review, Springer, Springer, vol. 30(1), pages 101-128, February.
    28. Seeman, Teresa & Merkin, Sharon S. & Crimmins, Eileen & Koretz, Brandon & Charette, Susan & Karlamangla, Arun, 2008. "Education, income and ethnic differences in cumulative biological risk profiles in a national sample of US adults: NHANES III (1988-1994)," Social Science & Medicine, Elsevier, Elsevier, vol. 66(1), pages 72-87, January.
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