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Publication year
Using Differences in Knowledge across Neighborhoods to Uncover the Impacts of the EITC on Earnings
Resource type
Authors/contributors
- Chetty, Raj (Author)
- Friedman, John N. (Author)
- Saez, Emmanuel (Author)
Title
Using Differences in Knowledge across Neighborhoods to Uncover the Impacts of the EITC on Earnings
Abstract
We estimate the impacts of the Earned Income Tax Credit on laborsupply using local variation in knowledge about the EITC schedule.We proxy for EITC knowledge in a Zip code with the fractionof individuals who manipulate reported self-employment income tomaximize their EITC refund. This measure varies significantly acrossareas. We exploit changes in EITC eligibility at the birth of a childto estimate labor supply effects. Individuals in high-knowledge areaschange wage earnings sharply to obtain larger EITC refunds relativeto those in low-knowledge areas. These responses come primarilyfrom intensive-margin earnings increases in the phase-in region.
Publication
American Economic Review
Volume
103
Issue
7
Pages
2683-2721
Date
2013-12
Citation
Chetty, R., Friedman, J. N., & Saez, E. (2013). Using Differences in Knowledge across Neighborhoods to Uncover the Impacts of the EITC on Earnings. American Economic Review, 103, 2683–2721.
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