Why the Earned Income Tax Credit? I have been studying social safety nets and cash transfers for ten years, and advised Venezuelan political parties in the development of a cash transfer program that we were unable to enact. My skepticism of government programs is offset by a sincere belief in evidence-backed policies and in-depth research that drove me into analyzing workfare programs. The EITC is claimed as one of the most successful programs in the US and I am evaluating its impact and effectiveness, believing we can improve it and decrease poverty in America, increase mobility, and use its lessons to alleviate poverty in developing countries.
"Revisiting the Intergenerational Effects of the Earned Income Tax Credit on the Long-Run Income of Children."
Abstract: This paper revisits the evidence on the intergenerational effects of the Earned Income Tax Credit (EITC) on the adult income of individuals whose families received the tax credit during childhood. I build on Bastian and Michelmore (2018) and test new sources of variation and new multigenerational data. Identification exploits an instrument that draws variation from formulaic changes across states and years. The results show that tax credit transfers during childhood increase adult income between 1.5 and 3.4 percent. The effect is concentrated on transfers received between 0 and 5 years old and, contrary to previous studies, transfers during adolescence have no impact on income. The intergenerational impact of the tax credit is driven by children of mothers working the fewest hours in the distribution, suggesting that work conditions offset the benefits of intergenerational poverty alleviation. The paper concludes that intergenerational poverty alleviation requires carefully accounting for the link between work incentives and the development of children.