Cash-on-Hand & College Enrollment: Evidence from Population Tax Data and Policy Nonlinearities
We estimate causal effects of tax refunds (cash-on-hand) on college enrollment using population-level administrative data from United States income tax returns. We implement two separate research designs based on tax refunds from the Earned Income Tax Credit (EITC). First, we exploit a nonlinearity in the tax refund schedule that results from the kink point between the phase-in and maximum credit portions of the schedule. Second, we use policy expansions in the EITC phase-out region. Both approaches yield similar results that suggest tax refunds received in the spring of the high school senior year have meaningful effects on college enrollment.
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This paper was revised on March 25, 2015
Document Object Identifier (DOI): 10.3386/w19836
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