TY  - JOUR
AU  - Chetty,Raj
AU  - Saez,Emmanuel
TI  - Teaching the Tax Code: Earnings Responses to an Experiment with EITC Recipients
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14836
PY  - 2009
Y2  - April 2009
UR  - http://www.nber.org/papers/w14836
L1  - http://www.nber.org/papers/w14836.pdf
N1  - Author contact info:
Raj Chetty
Department of Economics
Harvard University
1805 Cambridge St.
Cambridge, MA 02138
Tel: 617-744-9492
E-Mail: chetty@fas.harvard.edu

Emmanuel Saez
Department of Economics
University of California, Berkeley
530 Evans Hall #3880
Berkeley, CA 94720
Tel: 510/642-4631
Fax: 510/642-6615
E-Mail: saez@econ.berkeley.edu
M2  - featured in NBER digest on 2009-06-01
AB  - This paper tests whether providing information about the Earned Income Tax Credit (EITC) affects EITC recipients' earnings decisions. We conducted a randomized experiment with 43,000 EITC recipients at H&R Block in which tax preparers gave simple, personalized information about the EITC schedule to half of their clients. We find no significant effects of information provision on earnings in the subsequent year in the full sample. Further exploration uncovers evidence of heterogeneous treatment effects on both self-employment income and wage earnings across the 1,461 tax professionals who assisted the clients involved in the experiment. We conclude that providing information about tax incentives through tax preparers does not systematically affect earnings on average. However, tax preparers may be able to influence their clients' earnings decisions by providing advice about how to respond to tax incentives.

ER  -