Abstract

http://ssrn.com/abstract=1767567
 
 

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


Samara Gunter


Colby College - Department of Economics

April 30, 2012

CRCW and Fragile Families Working Paper WP11-03-FF

Abstract:     
This paper examines how low-income single parents alter their regular and informal labor supply in response to the EITC. Variation in state EITCs from 1997–2005 identifies changes in informal and regular labor supply of unmarried low-income parents in response to tax credits. Single fathers’ informal-sector participation declines by 7.3 percentage points, conditional on working in the regular sector, if a state EITC increases by 10 percent of the federal credit. Regular-sector hours worked per week increase by 4.5 and informal-sector hours per week fall by 2.2 with no significant effect on total hours.

Number of Pages in PDF File: 43

Keywords: informal economy, earned income tax credit

JEL Classification: H3, J2

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Date posted: February 24, 2011 ; Last revised: October 26, 2012

Suggested Citation

Gunter, Samara, State Earned Income Tax Credits and Participation in Regular and Informal Work (April 30, 2012). CRCW and Fragile Families Working Paper WP11-03-FF. Available at SSRN: http://ssrn.com/abstract=1767567 or http://dx.doi.org/10.2139/ssrn.1767567

Contact Information

Samara Gunter (Contact Author)
Colby College - Department of Economics ( email )
Waterville, ME 04901
United States
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