Credit Where it's Due: Investigating Pathways from EITC Expansion to Maternal Mental Health

44 Pages Posted: 21 May 2019

See all articles by Anuj Gangopadhyaya

Anuj Gangopadhyaya

Urban Institute

Fredric Blavin

The Urban Institute

Jason Gates

affiliation not provided to SSRN

Breno Braga

The Urban Institute; IZA

Date Written: March 2019

Abstract

While Earned Income Tax Credit (EITC) expansions are typically associated with improvements in maternal mental health, little is known about the mechanisms through which the program affects this outcome. The EITC could affect mental health through direct tax credit, changes in labor supply and changes in health insurance coverage of participants. To disentangle these mechanisms, we assess the effects of state and federal EITC expansion on mental health, employment and health insurance by maternal marital status. We find that federal EITC expansions are associated with 1) large positive effects on employment for unmarried mothers and 2) improved self-reported mental health for all mothers. State EITC expansion, which generate smaller changes in the effective wage rate, are associated with improvements in mental health for married mothers only and have no effect on employment for married or unmarried mothers. We find no impact of EITC expansions on health insurance coverage for married or unmarried mothers. These findings suggest that while EITC expansions improved mental health for unmarried mothers through a combination of the credit and employment, for married mothers, improved mental health is driven through the direct credit alone.

Keywords: earned income tax credit, state earned income tax credit, maternal mental health, labor supply, health insurance coverage

JEL Classification: H24, I12, I14

Suggested Citation

Gangopadhyaya, Anuj and Blavin, Fredric and Gates, Jason and Braga, Breno, Credit Where it's Due: Investigating Pathways from EITC Expansion to Maternal Mental Health (March 2019). IZA Discussion Paper No. 12233, Available at SSRN: https://ssrn.com/abstract=3390222

Anuj Gangopadhyaya (Contact Author)

Urban Institute ( email )

2100 M Street, NW
Washington, DC 20037
United States

Fredric Blavin

The Urban Institute ( email )

2100 M Street, N.W.
Washington, DC 20037
United States

Jason Gates

affiliation not provided to SSRN

No Address Available

Breno Braga

The Urban Institute ( email )

2100 M Street, NW
Washington, DC 20037
United States

IZA ( email )

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