State Earned Income Tax Credits and Participation in Regular and Informal Work
I use variation in state EITCs between 1997-2005 to identify changes in informal and regular labor supply by unmarried men and women with children. Men’s participation in the informal sector declines by 6 percentage points if a state EITC increases by 10% of the federal credit. Usual regular-sector hours worked per week increase by 4.1 and informal-sector hours per week fall by 2.7 with no effect on total hours. Single men with children appear to respond to state EITCs on the intensive rather than extensive margin and shift away from informal work toward regular work without changing total labor supplied. I find no effects on women’s participation in either regular or informal work.
|Date of creation:||Aug 2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (609) 258-1456
Fax: (609) 258-5974
Web page: http://crcw.princeton.edu/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Cancian, Maria & Levinson, Arik, 2006.
"Labor Supply Effects of the Earned Income Tax Credit: Evidence from Wisconsin's Supplemental Benefit for Families with Three Children,"
National Tax Journal,
National Tax Association, vol. 59(4), pages 781-800, December.
- Maria Cancian & Arik Levinson, 2005. "Labor Supply Effects of the Earned Income Tax Credit: Evidence from Wisconsin Supplemental Benefit for Families with Three Children," NBER Working Papers 11454, National Bureau of Economic Research, Inc.
- Sara LaLumia, 2009.
"The Earned Income Tax Credit and Reported Self-Employment Income,"
Department of Economics Working Papers
2009-07, Department of Economics, Williams College.
- LaLumia, Sara, 2009. "The Earned Income Tax Credit and Reported Self-Employment Income," National Tax Journal, National Tax Association, vol. 62(2), pages 191-217, June.
- Daniel Feenberg & Elisabeth Coutts, 1993. "An introduction to the TAXSIM model," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 12(1), pages 189-194.
- McCubbin, Janet, 2000. "EITC Noncompliance: The Determinants of the Misreporting of Children," National Tax Journal, National Tax Association, vol. 53(n. 4), pages 1135-64, December.
- Cowell, Frank A., 1985. "Tax evasion with labour income," Journal of Public Economics, Elsevier, vol. 26(1), pages 19-34, February.
When requesting a correction, please mention this item's handle: RePEc:pri:crcwel:wp11-03-ff. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (David Long)
If references are entirely missing, you can add them using this form.