Poster #150 - The Effect of Expansions to the Earned Income Tax Credit on the Material Hardship of Families with Children

• In Event: Friday Poster Reception

Abstract

In 2022, nearly half of children in the United States (45 percent, or 32 million) had experienced material hardship – difficulty meeting a basic need like food, housing, or health care – during their lifetime (HRSA-MCHB, 2023). While the effects of the Earned Income Tax Credit (EITC) on poverty are well-established, less is known about the effect of the EITC on experiences of material hardship. Using pooled data from four waves of the Survey of Income and Program Participation (SIPP) and a difference-in-difference identification strategy, I estimate the effect of the 2009 EITC expansion for households with three or more qualifying children on the likelihood of experiencing any one of several dimensions of material hardship: hardship related to essential expenses, housing, utilities, unmet medical need, and food insecurity, as well as estimate effects on each dimension of hardship individually. Results indicate that the 2009 EITC expansion led to a significant decrease in the likelihood of experiencing material hardship. Impacted households were less likely to report any material hardship, reported fewer total hardship dimensions, and saw reductions in five of six individual dimensions of hardship. These findings are largely consistent with previous analyses of the effect of tax credits on measures of material hardship.

Author

• Victoria Hunter Gibney, Center on Budget and Policy Priorities
  Presenting Author