Working Paper Series
IFAU - Institute for Evaluation of Labour Market and Education Policy
Bruce D. Meyer
The US earned income tax credit, its effects, and possible reforms
Abstract: In this paper, I first summarize how the US Earned Income
Tax Credit (EITC) operates and describe the characteristics of recipients.
I then discuss empirical work on the effects of the EITC on poverty and
income distribution, and its effects on labor supply. Next, I discuss a few
policy concerns about the EITC: possible negative effects on hours of work
and marriage, and problems of compliance with the tax system. I then
briefly discuss some possible reforms to the structure of the current
Keywords: Welfare reform; Earned income tax credit; EITC; Earnings subsidies; Tax credits; Poverty; (follow links to similar papers)
JEL-Codes: D31; H24; I38; J38; (follow links to similar papers)
30 pages, May 17, 2008
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