The EITC, Tax Refunds, and Unemployment Spells
AbstractThe Earned Income Tax Credit generates large average tax refunds for low-income parents, and these refunds are distributed in a narrow time frame. I rely on this plausibly exogenous source of variation in liquidity to investigate the effect of cash-on-hand on unemployment duration. Among EITC-eligible women, unemployment spells beginning just after tax refund receipt last longer than unemployment spells beginning at other times of year. There is no evidence that tax refund receipt is associated with longer unemployment duration for men, or that the longer durations for women are associated with higher-quality subsequent job matches.
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Bibliographic InfoPaper provided by Department of Economics, Williams College in its series Department of Economics Working Papers with number 2011-08.
Length: 46 pages
Date of creation: Jul 2011
Date of revision:
Other versions of this item:
- Sara LaLumia, 2013. "The EITC, Tax Refunds, and Unemployment Spells," American Economic Journal: Economic Policy, American Economic Association, American Economic Association, vol. 5(2), pages 188-221, May.
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-07-13 (All new papers)
- NEP-CIS-2011-07-13 (Confederation of Independent States)
- NEP-HIS-2011-07-13 (Business, Economic & Financial History)
- NEP-TRA-2011-07-13 (Transition Economics)
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- Sara LaLumia & James M. Salle & Nicolas Turner, 2013.
"New Evidence on Taxes and the Timing of Birth,"
Department of Economics Working Papers, Department of Economics, Williams College
2013-06, Department of Economics, Williams College.
- Raj Chetty & Amy Finkelstein, 2012. "Social Insurance: Connecting Theory to Data," NBER Working Papers 18433, National Bureau of Economic Research, Inc.
- Blaufus, Kay & Hechtner, Frank & Möhlmann, Axel, 2014. "The effect of tax preparation expenses for employees: Evidence from Germany," arqus Discussion Papers in Quantitative Tax Research 157, arqus - Arbeitskreis Quantitative Steuerlehre.
- The EITC, Tax Refunds, and Unemployment Spells (AEJ:EP 2013) in ReplicationWiki
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