Income, the Earned Income Tax Credit, and Infant Health

48 Pages Posted: 7 Jul 2012 Last revised: 12 Jul 2012

See all articles by Hilary Williamson Hoynes

Hilary Williamson Hoynes

University of California, Berkeley; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Douglas L. Miller

University of California, Davis - Department of Economics

David Simon

University of California, Davis

Date Written: July 2012

Abstract

This paper evaluates the health impact of a central piece in the U.S. safety net for families with children: the Earned Income Tax Credit. Using tax-reform induced variation in the federal EITC, we examine the impact of the credit on infant health outcomes. We find that increased EITC income reduces the incidence of low birth weight and increases mean birth weight. For single low education (<= 12 years) mothers, a policy-induced treatment on the treated increase of $1000 in EITC income is associated with 6.7 to 10.8% reduction in the low birth weight rate, with larger impacts for births to African American mothers. These impacts are evident with difference-in-difference models and event study analyses. Our results suggest that part of the mechanism for this improvement in birth outcomes is the result of more prenatal care and less negative health behaviors (smoking). We find little role for changes in health insurance. We contribute to the literature by establishing that an exogenous increase in income can improve health, and illustrating a health impact of a non-health program. More generally, we demonstrate the potential for positive external benefits of the social safety net.

Suggested Citation

Hoynes, Hilary Williamson and Miller, Douglas L. and Simon, David, Income, the Earned Income Tax Credit, and Infant Health (July 2012). NBER Working Paper No. w18206, Available at SSRN: https://ssrn.com/abstract=2101954

Hilary Williamson Hoynes (Contact Author)

University of California, Berkeley ( email )

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IZA Institute of Labor Economics

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Douglas L. Miller

University of California, Davis - Department of Economics ( email )

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David Simon

University of California, Davis ( email )

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Davis, CA 95616
United States

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