RT Journal Article
SR Electronic
T1 Do In-Work Tax Credits Serve as a Safety Net?
JF Journal of Human Resources
JO J Hum Resour
FD University of Wisconsin Press
SP 319
OP 350
DO 10.3368/jhr.52.2.0614-6433R1
VO 52
IS 2
A1 Bitler, Marianne
A1 Hoynes, Hilary
A1 Kuka, Elira
YR 2017
UL http://jhr.uwpress.org/content/52/2/319.abstract
AB We test the EITC’s response to economic need. Using IRS data we exploit differences in timing and severity of economic cycles across states. Because the EITC requires earned income, there is a theoretical ambiguity in the credit’s cyclicality. We find higher unemployment leads to increased likelihood of EITC recipiency and in credit amounts received for married couples but has insignificant effects for single individuals. The EITC’s protective effects are concentrated among skilled workers. The EITC mitigates income shocks for married couples with children and groups likely to have moderate earnings, but does not for most recipients: single parents with children.