Does Informing Employees About Tax Benefits Increase Take-Up?: Evidence From EITC Notification Laws

38 Pages Posted: 30 Jan 2019 Last revised: 20 Apr 2019

See all articles by Taylor Cranor

Taylor Cranor

Stanford Law School

Jacob Goldin

Stanford Law School

Sarah Kotb

affiliation not provided to SSRN

Date Written: April 18, 2019

Abstract

Incomplete take-up of the Earned Income Tax Credit (EITC) is a source of persistent policy concern, with an estimated one-fifth of eligible households failing to claim the credit. To promote take-up, a growing number of jurisdictions require employers to provide EITC information to employees. We study the effect of these requirements, linking state and time variation in the adoption of the notification laws to administrative tax data. Our preferred specification yields precise null effects on EITC take-up, filing behavior, and labor force participation. The results cast doubt on the effectiveness of the notice requirements as implemented and suggest further research into other avenues for increasing tax benefit take-up.

Keywords: Earned Income Tax Credit, Benefit Take-Up, Nudges

Suggested Citation

Cranor, Taylor and Goldin, Jacob and Kotb, Sarah, Does Informing Employees About Tax Benefits Increase Take-Up?: Evidence From EITC Notification Laws (April 18, 2019). Stanford Law and Economics Olin Working Paper No. 530. Available at SSRN: https://ssrn.com/abstract=3318077 or http://dx.doi.org/10.2139/ssrn.3318077

Taylor Cranor

Stanford Law School

559 Nathan Abbott Way
Stanford, CA 94305-8610
United States

Jacob Goldin (Contact Author)

Stanford Law School ( email )

559 Nathan Abbott Way
Stanford, CA 94305-8610
United States

Sarah Kotb

affiliation not provided to SSRN

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