For Love or Money? How the EITC Affects the Living Arrangements of Single Mothers

• In Event: 422 - Section on the Sociology of the Family Paper Session. Family Inequality

Abstract

Single mothers’ choices of living arrangements are based on financial necessity and preferences. We ask whether the annual infusion of cash that lower-income single mothers receive from the Earned Income Tax Credit (EITC) is associated with a change in their living arrangements: whether they move into or out of living alone, with a romantic partner, or with other adults. Using the 1996-2004 panels of the Survey of Income and Program Participation (SIPP), we find that during the months following typical EITC receipt (March-May) single mothers are less likely to have shared living arrangements. This occurs because they are more likely to move out of doubled up or cohabiting situations. EITC receipt, however, is not related to recipients’ likelihood of entering shared living arrangements. This demonstrates that the boost to financial independence the EITC offers to single mothers allows them to live on their own, suggesting that policy can facilitate single mothers’ ability to make residential decisions based on preferences rather than financial necessity.

Authors

• Sarah Halpern-Meekin, University of Wisconsin - Madison

• Laura M. Tach, Cornell University