The Earned Income Tax Credit and Union Formation: The Impact of Expected Spouse Earnings

39 Pages Posted: 27 May 2015 Last revised: 20 Oct 2016

See all articles by Katherine Michelmore

Katherine Michelmore

University of Michigan at Ann Arbor; Syracuse University

Date Written: May 26, 2015


The earned income tax credit (EITC) has become the largest cash transfer program in the United States, distributing nearly $60 billion dollars in credits in 2010. Several studies have evaluated the impact of the EITC on various aspects of behavioral responses. Using the Survey of Income and Program Participation from 2001, 2004, and 2008, I investigate how the change in expected household EITC benefits associated with marrying affect cohabitation and marriage behavior among low-income women. I first simulate a marriage market to predict potential spouse earnings for a sample of low-income women in order to estimate the potential losses or gains in EITC benefits upon marriage. Using multinomial logistic regressions, I then analyze how not only the value of the EITC, but also the anticipated loss in EITC benefits upon marriage affects the likelihood of marrying or cohabiting. Results suggest that the average EITC-eligible woman can expect to lose approximately $1,000 in EITC benefits in the year following marriage, or about half of her pre-marriage benefit. Further, I find that a $1,000 loss in expected EITC benefits upon marriage is associated with a 1.1 percentage point decline in the likelihood of marrying and a 0.7 percentage point increase in the likelihood of cohabiting.

Keywords: Earned Income Tax Credit, Marriage, Cohabitation, Marriage Penalties

JEL Classification: D1, H2, I3, J1

Suggested Citation

Michelmore, Katherine, The Earned Income Tax Credit and Union Formation: The Impact of Expected Spouse Earnings (May 26, 2015). Available at SSRN: or

Katherine Michelmore (Contact Author)

University of Michigan at Ann Arbor ( email )

500 S. State Street
Ann Arbor, MI 48109
United States

Syracuse University ( email )

900 S. Crouse Avenue
Syracuse, NY 13244-2130
United States

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