Single Mothers’ EITC Receipt Dynamics

41 Pages Posted: 8 Jan 2015

See all articles by Bradley Heim

Bradley Heim

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA)

Ithai Lurie

U.S. Department of the Treasury, Office of Tax Analysis (OTA)

Date Written: June 11, 2014

Abstract

This paper uses a 1987-2006 panel of tax returns to examine how EITC claiming behavior among single mothers changed following the 1990s EITC expansions and the passage of welfare reform. We find that the continuation rate of being a claimant increased, while exits to non-primary-filer status decreased (particularly among longer-term claimants). Entrants from non-primary-filer status increased as well. We find that the increase in the EITC maximum helps to explain much of the increase in continuation rates, while the reduction in AFDC/TANF maximum benefits and the increase in maximum EITC amounts help to explain the decrease in exits to non-primary-filer.

Keywords: Earned Income Tax Credit, Single Mothers, Markov Chain

JEL Classification: H31, H24

Suggested Citation

Heim, Bradley and Lurie, Ithai, Single Mothers’ EITC Receipt Dynamics (June 11, 2014). Indiana University, Bloomington School of Public & Environmental Affairs Research Paper No. 2546072, Available at SSRN: https://ssrn.com/abstract=2546072 or http://dx.doi.org/10.2139/ssrn.2546072

Bradley Heim (Contact Author)

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA) ( email )

1315 East Tenth Street
Bloomington, IN 47405
United States

Ithai Lurie

U.S. Department of the Treasury, Office of Tax Analysis (OTA) ( email )

1500 Pennsylvania Ave., N.W.
Washington, DC 22203
United States

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