Scandinavian Working Papers in Economics
Working Paper Series,
IFAU - Institute for Evaluation of Labour Market and Education Policy
No 2008:14: The US earned income tax credit, its effects, and possible reforms
Bruce D. Meyer ()
Additional contact information
Bruce D. Meyer: Harris School of Public Policy Studies, University of Chicago, Postal: 1155 E. 60th Street, Chicago, IL 60637, USA
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 EITC.
Keywords: Welfare reform; Earned income tax credit; EITC; Earnings subsidies; Tax credits; Poverty
30 pages, May 17, 2008
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wp08-14.pdf
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