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The Earned Income Tax Credit and Food Consumption Patterns

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Abstract

The Earned Income Tax Credit is unique among social programs in that benefits are not paid out evenly across the calendar year. We exploit this feature of the EITC to investigate how the credit influences the food expenditure patterns of eligible households. We find that eligible households spend relatively more on healthy items including fresh fruit and vegetables, meat and poultry, and dairy products during the months when most refunds are paid.

Suggested Citation

  • Leslie McGranahan & Diane Whitmore Schanzenbach, 2013. "The Earned Income Tax Credit and Food Consumption Patterns," Working Paper Series WP-2013-14, Federal Reserve Bank of Chicago.
  • Handle: RePEc:fip:fedhwp:wp-2013-14
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    References listed on IDEAS

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    1. Andrew Goodman-Bacon & Leslie McGranahan, 2008. "How do EITC recipients spend their refunds?," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 32(Q II), pages 17-32.
    2. Bruce D. Meyer & Wallace K. C. Mok & James X. Sullivan, 2009. "The Under-Reporting of Transfers in Household Surveys: Its Nature and Consequences," NBER Working Papers 15181, National Bureau of Economic Research, Inc.
    3. Barrow, Lisa & McGranahan, Leslie, 2000. "The Effects of the Earned Income Credit on the Seasonality of Household Expenditures," National Tax Journal, National Tax Association;National Tax Journal, vol. 53(4), pages 1211-1244, December.
    4. 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.
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    Cited by:

    1. Lauren E. Jones & Kevin Milligan & Mark Stabile, 2019. "Child cash benefits and family expenditures: Evidence from the National Child Benefit," Canadian Journal of Economics, Canadian Economics Association, vol. 52(4), pages 1433-1463, November.
    2. Tzu-Ting Yang, 2016. "Family Labor Supply and the Timing of Cash Transfers: Evidence from the Earned Income Tax Credit," IEAS Working Paper : academic research 16-A012, Institute of Economics, Academia Sinica, Taipei, Taiwan.
    3. Markowitz, Sara & Komro, Kelli A. & Livingston, Melvin D. & Lenhart, Otto & Wagenaar, Alexander C., 2017. "Effects of state-level Earned Income Tax Credit laws in the U.S. on maternal health behaviors and infant health outcomes," Social Science & Medicine, Elsevier, vol. 194(C), pages 67-75.
    4. Khanal, Binod, 2020. "Cash transfers and consumption of healthy and unhealthy food: evidence from tax refunds," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304346, Agricultural and Applied Economics Association.
    5. Bruce Western & Deirdre Bloome & Benjamin Sosnaud & Laura M. Tach, 2016. "Trends in Income Insecurity Among U.S. Children, 1984–2010," Demography, Springer;Population Association of America (PAA), vol. 53(2), pages 419-447, April.
    6. Jiwei Chen, 2021. "Do minimum wage increases benefit worker health? Evidence from China," Review of Economics of the Household, Springer, vol. 19(2), pages 473-499, June.
    7. Otto Lenhart, 2019. "The effects of income on health: new evidence from the Earned Income Tax Credit," Review of Economics of the Household, Springer, vol. 17(2), pages 377-410, June.
    8. Robin Boadway & Jean‐Denis Garon & Louis Perrault, 2019. "Optimal mixed taxation, credit constraints, and the timing of income tax reporting," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 21(4), pages 708-737, August.
    9. Dayanand S. Manoli & Nicholas Turner, 2014. "Nudges and Learning: Evidence from Informational Interventions for Low-Income Taxpayers," NBER Working Papers 20718, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    Earned Income Tax Credit; Obesity; Healthy Eating; Food Expenditures;
    All these keywords.

    JEL classification:

    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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