CPR Working Paper Series No. 13

The EITC: Expectation, Knowledge, Use, and Economic and Social Mobility

Timothy M. Smeeding, Katherin Ross Phillips, 
and Michael O'Connor

 April 2000
(Revised from October 1999)

Abstract:  This paper presents initial findings on the economic impact of the Earned Income Tax Credit (EITC) based on a sample of Chicago area households that filed tax returns in the spring of 1998. Respondents reported on their detailed use of the funds to pay bills, purchase new items, or save. Asset information on the households was also gathered, along with questions regarding the ability of households to make particular expenditures without the help of the EITC. Uses of the EITC are divided into those that improve social mobility (e.g., purchase a car, pay tuition, change housing) and those that primarily help to make ends meet (e.g., pay routine bills, purchase food) and determinants of each are explored in a regression framework. The paper also explores the relationship among the financial system, asset and borrowing status, and EITC usage. Implications for tax policy and social policy are drawn in conclusion. As far as we know, this is the first research to address these issues, despite the fact that, excluding programs for the elderly and Medicaid, the EITC is our largest federal entitlement program.

You can download a PDF version of the paper and view it and print it using a FREE copy of Adobe Acrobat Reader.

Click here for the Adobe Acrobat version of CPR Working Paper 13

Or

for more information on ordering a hard copy of this paper, please contact the Publications Officer, Center for Policy Research, 426 Eggers Hall, Syracuse University, Syracuse, New York 13244-1020 or e-mail our Publications Officer at puboff@maxwell.syr.edu. Each hard copy costs $5.00 (US) and payment should be included with mail order.

File current as of

If you have any questions or comments, please contact the webmaster.