The Earned Income Tax Credit, Health, and Happines

41 Pages Posted: 10 Feb 2013 Last revised: 8 Mar 2013

See all articles by Casey Boyd-Swan

Casey Boyd-Swan

Arizona State University (ASU), School of Public Affairs

Chris M. Herbst

Arizona State University (ASU) - School of Public Affairs

John Ifcher

Santa Clara University - Leavey School of Business - Economics Department

Homa Zarghamee

Santa Clara University - Leavey School of Business

Date Written: December 1, 2012

Abstract

This paper contributes to the small but growing literature evaluating the health effects of the Earned Income Tax Credit (EITC). In particular, we use data from the National Survey of Families and Households to study the impact of the 1990 federal EITC expansion on several outcomes related to mental health and subjective well-being. The identification strategy relies on a difference-in-differences framework to estimate intent-to-treat effects for the post-reform period. Our results suggest that the 1990 EITC reform generated sizeable health benefits for low-skilled mothers. Such women experienced lower depression caseness, an increase in self-reported happiness, and improved self-efficacy relative to their childless counterparts. Consistent with previous work, we find that married mothers captured most of the health benefits, with unmarried mothers’ health changing very little following the 1990 EITC reform.

Keywords: earned income tax credit (EITC), happiness, health, omnibus reconciliation act of 1990 (OBRA90), single mothers

JEL Classification: H2, I1, H51

Suggested Citation

Boyd-Swan, Casey and Herbst, Chris M. and Ifcher, John and Zarghamee, Homa, The Earned Income Tax Credit, Health, and Happines (December 1, 2012). Available at SSRN: https://ssrn.com/abstract=2213436 or http://dx.doi.org/10.2139/ssrn.2213436

Casey Boyd-Swan

Arizona State University (ASU), School of Public Affairs ( email )

Farmer Building 440G PO Box 872011
Tempe, AZ
United States

Chris M. Herbst

Arizona State University (ASU) - School of Public Affairs ( email )

Box 870603
Tempe, AZ 85287
United States

John Ifcher (Contact Author)

Santa Clara University - Leavey School of Business - Economics Department ( email )

500 El Camino Real
Santa Clara, CA California 95053
United States

Homa Zarghamee

Santa Clara University - Leavey School of Business ( email )

500 El Camino Real
Santa Clara, CA California 95053
United States

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