scholarly journals Cash-on-Hand and College Enrollment: Evidence from Population Tax Data and the Earned Income Tax Credit

2018 ◽  
Vol 10 (2) ◽  
pp. 242-271 ◽  
Author(s):  
Day Manoli ◽  
Nicholas Turner
Keyword(s):  
High School ◽  
Income Tax ◽  
College Enrollment ◽  
Earned Income Tax Credit ◽  
Tax Credit ◽  
High School Senior ◽  
Senior Year ◽  
Earned Income ◽  
School Senior ◽  
Tax Refunds

We estimate causal effects of cash-on-hand on college enrollment decisions of students from low-income families. Using population-level, administrative data from US income tax returns, we exploit variation in tax refunds received in the spring of the high school senior year. The variation in tax refunds results from the kink point between the phase-in and maximum credit portions of the Earned Income Tax Credit schedule. The results suggest tax refunds received in the spring of the high school senior year have meaningful effects on college enrollment. (JEL D14, H24, I22, I23, I24)

scholarly journals The EITC, Tax Refunds, and Unemployment Spells

2013 ◽  
Vol 5 (2) ◽  
pp. 188-221 ◽  
Author(s):  
Sara LaLumia
Keyword(s):  
Low Income ◽  
Income Tax ◽  
Time Frame ◽  
Earned Income Tax Credit ◽  
Unemployment Duration ◽  
Tax Credit ◽  
Earned Income ◽  
Tax Refunds ◽  
Unemployment Spells ◽  
Exogenous Source

The earned income tax credit generates large average tax refunds for low-income parents, and these refunds are distributed in a narrow time frame. I rely on this plausibly exogenous source of variation in liquidity to investigate the effect of cash on hand on unemployment duration. Among EITC-eligible women, unemployment spells beginning just after tax refund receipt last longer than unemployment spells beginning at other times of year. There is no evidence that tax refund receipt is associated with longer unemployment duration for men, or that the longer durations for women are associated with higher-quality subsequent job matches. (JEL H24, J64)

scholarly journals Who Benefits from the Earned Income Tax Credit? Incidence among Recipients, Coworkers and Firms

2010 ◽  
Vol 10 (1) ◽  
Author(s):  
Andrew Leigh
Keyword(s):  
High School ◽  
Income Tax ◽  
College Graduates ◽  
Labor Demand ◽  
High School Dropouts ◽  
Earned Income Tax Credit ◽  
Tax Credit ◽  
School Dropouts ◽  
Earned Income ◽  
Demographic Groups

Abstract How are hourly wages affected by the Earned Income Tax Credit? Using variation in state EITC supplements, I find that a 10 percent increase in the generosity of the EITC is associated with a 5 percent fall in the wages of high school dropouts and a 2 percent fall in the wages of those with only a high school diploma, while having no effect on the wages of college graduates. Given the large increase in labor supply induced by the EITC, this is consistent with most reasonable estimates of the elasticity of labor demand. Although workers with children receive a much larger EITC than childless workers, and the effect of the credit on labor force participation is larger for those with children, the hourly wages of both groups are similarly affected by an EITC increase. As a check on this strategy, I also use federal variation in the EITC across gender-age-education groups, and find that those demographic groups that received the largest EITC increases also experienced a drop in their hourly wages, relative to other groups.

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