Using Differences in Knowledge across Neighborhoods to Uncover the Impacts of the EITC on Earnings

S-Tier
Journal: American Economic Review
Year: 2013
Volume: 103
Issue: 7
Pages: 2683-2721

Score contribution per author:

2.681 = (α=2.01 / 3 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We estimate the impacts of the Earned Income Tax Credit on labor supply using local variation in knowledge about the EITC schedule. We proxy for EITC knowledge in a Zip code with the fraction of individuals who manipulate reported self-employment income to maximize their EITC refund. This measure varies significantly across areas. We exploit changes in EITC eligibility at the birth of a child to estimate labor supply effects. Individuals in high-knowledge areas change wage earnings sharply to obtain larger EITC refunds relative to those in low-knowledge areas. These responses come primarily from intensive-margin earnings increases in the phase-in region.

Technical Details

RePEc Handle
repec:aea:aecrev:v:103:y:2013:i:7:p:2683-2721
Journal Field
General
Author Count
3
Added to Database
2026-01-25