Indiana University SPEA Edward J. Bloustein School of Planning and Public Policy University of Pennsylvania AIR American University

Panel Paper: Are In-Work Tax Credits Effective in the Presence of Generous Public Assistance? Evidence from the 1975 Earned Income Tax Credit

Friday, November 13, 2015 : 10:55 AM
President's Room (Hyatt Regency Miami)

*Names in bold indicate Presenter

Jacob Bastian, University of Michigan
Working mothers played an important role in the twentieth-century rise in female employment. The employment gap between mothers and women without children rose steadily between 1900 and the early 1970s, when it suddenly began to fall. I show that the introduction of the Earned Income Tax Credit (EITC) in 1975 was partly responsible for this rise of working mothers. The EITC led to a 9-percent rise in the employment of mothers by 1979. I also find heterogeneous employment responses to the EITC consistent with a simple labor-leisure model. This is the first systematic study of the 1975 EITC.

Full Paper: