Income, the Earned Income Tax Credit, and Infant Health
This paper evaluates the health impact of a central piece in the U.S. safety net for families with children: the Earned Income Tax Credit. Using tax-reform induced variation in the federal EITC, we examine the impact of the credit on infant health outcomes. We find that increased EITC income reduces the incidence of low birth weight and increases mean birth weight. For single low education (<= 12 years) mothers, a policy-induced treatment on the treated increase of $1000 in EITC income is associated with 6.7 to 10.8% reduction in the low birth weight rate, with larger impacts for births to African American mothers. These impacts are evident with difference-in-difference models and event study analyses. Our results suggest that part of the mechanism for this improvement in birth outcomes is the result of more prenatal care and less negative health behaviors (smoking). We find little role for changes in health insurance. We contribute to the literature by establishing that an exogenous increase in income can improve health, and illustrating a health impact of a non-health program. More generally, we demonstrate the potential for positive external benefits of the social safety net.
We acknowledge support from the UC Davis Center for Poverty Research, which receives funding from the U.S. Department of Health and Human Services. Doug Miller also thanks the Center for Health and Wellbeing at Princeton University for support. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
- The Earned Income Tax Credit (EITC) has become the most important cash transfer program for low-income families - in 2010, the EITC reached...
Hilary Hoynes & Doug Miller & David Simon, 2015. "Income, the Earned Income Tax Credit, and Infant Health," American Economic Journal: Economic Policy, American Economic Association, vol. 7(1), pages 172-211, February. citation courtesy of