The Effects of 1993 EITC Expansion on Marginal Tax Rates
AbstractThe Earned Income Tax Credit (EITC) expansion affects labor supply and hence wages through changes in marginal tax rates (MTRs). This paper describes the effects of the 1993 EITC expansion on MTRs experienced by unmarried women. To demonstrate changes in MTRs, I use variation in the federal and state EITCs under the 1993 EITC expansion. Results suggest that the 1993 EITC expansion results in differential decreases in MTRs faced by unmarried women. Women with lower education experienced a larger decrease in their MTRs. Moreover, among women with the same education level, those with two or more children faced a larger decrease relative to those with one child and those with no children.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 18986.
Date of creation: Dec 2007
Date of revision:
Earned Income Tax Credit; Unmarried Women; and Marginal Tax Rates;
Find related papers by JEL classification:
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
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