How Do Government Benefits Affect Elections? Evidence from State Earned Income Tax Credits
47 Pages Posted: 26 Sep 2019 Last revised: 14 May 2020
Date Written: September 16, 2019
Whether and how individuals link benefits they receive from the government to their voting behavior is a central question in political economy. We study this question using one of the largest social provision programs in the United States: The Earned Income Tax Credit (EITC). We exploit the staggered roll-out of state-level EITC programs to estimate the causal effect of the program on elections, voter behavior, and attitudes about the government. Contrary to predictions from the policy feedback literature, we show that the credit leads to higher vote shares and approval ratings for the implementing governor. These effects are temporally limited to the first years of the credit's availability, and dissipate over time. Taken together, our results suggest that voters are responsive to the benefit.
Keywords: Tax policy, state taxes, economic voting, policy feedback
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