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Who benefits from the earned income tax credit? Incidence among recipients, coworkers and firms

Leigh, Andrew

Description

How are hourly wages affected by the Earned Income Tax Credit? Two strategies are utilized to determine the relationship between the credit and hourly wages. First, I use variation in state EITC supplements, which magnify the effect of the federal EITC. I find that a 10 percent increase in the generosity of the EITC is associated with a 4 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...[Show more]

CollectionsANU Research Publications
Date published: 2005
Type: Working/Technical Paper
URI: http://hdl.handle.net/1885/43038
Source: The BE Journal of Economic Analysis & Policy

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