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State Earned Income Tax Credits and Participation in Regular and Informal Work

Listed author(s):
  • Samara Potter Gunter

    (Colby College)

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.

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File URL: http://crcw.princeton.edu/workingpapers/WP11-03-FF.pdf
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Paper provided by Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Research on Child Wellbeing. in its series Working Papers with number 1298.

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Date of creation: Aug 2010
Handle: RePEc:pri:crcwel:wp11-03-ff.pdf
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