Authors
Jacob Bastian, Katherine Michelmore
Publication date
2018/10/1
Journal
Journal of Labor Economics
Volume
36
Issue
4
Pages
1127-1163
Publisher
University of Chicago Press
Description
Using 4 decades of variation in the federal and state Earned Income Tax Credit (EITC), we estimate the impact of exposure to EITC expansions in childhood on education and employment outcomes in adulthood. Reduced-form results suggest that an additional $1,000 in EITC exposure when a child is 13–18 years old increases the likelihood of completing high school (1.3%), completing college (4.2%), and being employed as a young adult (1.0%) and earnings by 2.2%. Our analysis reveals that the primary channel through which the EITC improves these outcomes is increases in pretax family earnings.
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