Taxation and Labor Force Participation: The EITC Reconsideredsaez/course131/KlevenEITCSlides.pdf · The Earned Income Tax Credit (EITC) I A means-tested transfer that is conditional

Taxation and Labor Force Participation:The EITC Reconsidered

Henrik Kleven

Princeton University and NBER

October 2018

The Extensive Margin of Labor Supply

I A consensus view that extensive margin responses are largerthan intensive margin responses

I Where does this consensus originate from?

I Early labor supply literature (Heckman 1993)

I Macro business cycle literature (Hansen 1985; Rogerson 1988)

I Labor supply literature studying EITC reform(Eissa & Liebman 1996; Meyer & Rosenbaum 2001)

I A meta study by Chetty et al. (2013) puts the extensive marginelasticity at around 0.3

2 / 167

The Earned Income Tax Credit (EITC)

I A means-tested transfer that is conditional on positive earningsand children

I A large literature studies the labor supply effects of the EITC,particularly on single mothers

I Most of this work exploits federal EITC expansions enacted in1986, 1990, and 1993

I Nichols & Rothstein (2015) summarize the consensus view:

There is remarkable consensus around a few key results (...)essentially all authors agree that the EITC expansion led tosizeable increases in single mothers’ employment rates

3 / 167

Literature

I Labor market impacts of the EITC:

Dickert, Houser & Scholz (1995), Eissa & Liebman (1996), Ellwood (2000),Meyer & Rosenbaum (2001), Neumark & Wascher (2001), Hotz & Scholz(2003), Grogger (2003), Eissa & Hoynes (2004, 2006, 2011), Cancian &Levinson (2005), Hotz, Mullin & Scholz (2006), Hoynes (2009), Rothstein(2010), Gelber & Mitchell (2012), Chetty, Friedman & Saez (2013), Looney &Manoli (2013), Bastian (2018)

I Labor market impacts of the FC/WFTC/WTC:

Blundell et al. (2000), Blundell & Hoynes (2004), Blundell, Brewer &Shepard (2005), Brewer et al. (2006), Leigh (2007), Francesconi & Klauw(2007), Francesconi, Rainer & Klaauw (2009), Gregg, Harkness & Smith(2009), Blundell et al. (2016)

4 / 167

Why Revisit This Question?

I Have I found a new source of identifying variation? (NO)

I I study EITC reforms in the US (federal and state)

I I study WFTC/WTC reforms in the UK

I Have I gained access to better data? (NO)

I I use CPS data for the US and LFS/BHPS data for the UK

I So I study the same data and reforms, but viewed through adifferent lens

I The consensus view is based on work from about 20 years ago

5 / 167

In-Work Transfers in the US and UK

6 / 167

EITC Schedule in 2017

0 children

1 child

2 children

3+ children

020

0040

0060

00An

nual

Cre

dit (

USD

)

0 10000 20000 30000 40000 50000 60000Earnings (USD)

7 / 167

EITC Maximum Credit Over Time

0 children

1 child

2 children

3+ children

Tax ReductionAct of 1975 TRA86 OBRA90 OBRA93 ARRA

02,

000

4,00

06,

000

Max

imum

Ann

ual C

redi

t (20

17 U

SD)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year

8 / 167

EITC vs WTC Schedules in 2017Single Women with 1 Child

050

0010

000

1500

020

000

Annu

al C

redi

t (U

SD)

0 10000 20000 30000 40000 50000 60000Earnings (USD)

EITCWTC w/ childcare subsidyWTC, w/o childcare subsidy

2 Children9 / 167

WTC Maximum Credit Over Time

3 children

1 child

2 children

0 children

FIS FC WFTC WTC

010

000

2000

030

000

4000

0M

axim

um A

nnua

l Cre

dit (

2017

USD

)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year

With Child Tax Credit

10 / 167

EITC Effects on the Extensive Margin?

11 / 167

Data

I Current Population Survey (CPS), March filesI 50-year period (1968-2018)I From around 150,000 to 200,000 individuals per year

I Measures of extensive margin labor supply:

1. Employed last week

2. Participated last weekI Employed or unemployed last week

3. Employed last yearI Positive earnings last year

4. Participated last yearI Employed or unemployed for 1+ weeks last year

Extensive Margin Measures

12 / 167

Labor Force Participation of Single WomenWith and Without Children

2.6

4.6

Une

mpl

oym

ent R

ate

5060

7080

9010

0La

bor F

orce

Par

ticip

atio

n (%

)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year

With Children Without Children

Annual Employment Low Education13 / 167


50 years of relative stability,apart from these 5 years

2.6

4.6

Une

mpl

oym

ent R

ate

5060

7080

9010

0La

bor F

orce

Par

ticip

atio

n (%

)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year




14.5pp

14pp


2.6

4.6

Une

mpl

oym

ent R

ate

5060

7080

9010

0La

bor F

orce

Par

ticip

atio

n (%

)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year





2.6

4.6

Unem

ploy

men

t Rat

e

5060

7080

9010

0La

bor F

orce

Par

ticip

atio

n (%

)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year




Tax ReductionAct of 1975 TRA86 OBRA90 OBRA93 ARRAPRWORA

2.6

4.6

Unem

ploy

men

t Rat

e

5060

7080

9010

0La

bor F

orce

Par

ticip

atio

n (%

)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year





State WelfareWaivers

2.6

4.6

Unem

ploy

men

t Rat

e

5060

7080

9010

0La

bor F

orce

Par

ticip

atio

n (%

)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year






46

810

Unem

ploy

men

t Rat

e

5060

7080

9010

0La

bor F

orce

Par

ticip

atio

n (%

)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year

With Children Without Children Unemployment


Labor Force Participation of Single WomenBy Number of Children


4050

6070

8090

Labo

r For

ce P

artic

ipat

ion

(%)

-1 -.5 0 .5 1

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year

0 children 1 child 2 children 3+ children




Much larger increaseby those with 3+ kids40

5060

7080

90La

bor F

orce

Par

ticip

atio

n (%

)

-1 -.5 0 .5 1

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year





But no increase hereby those with 3+ kids

4050

6070

8090

Labo

r For

ce P

artic

ipat

ion

(%)

-1 -.5 0 .5 1

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year





And no increasehere either

4050

6070

8090

Labo

r For

ce P

artic

ipat

ion

(%)

-1 -.5 0 .5 1

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year


Annual Employment Low Education Skip Married23 / 167

Labor Force Participation of Married WomenWith and Without Children


2.6

4.6

Unem

ploy

men

t Rat

e

4050

6070

8090

Labo

r For

ce P

artic

ipat

ion

(%)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year


Annual Employment Low Education 24 / 167

Labor Force Participation of Married WomenWith and Without Children (Spousal Earnings Below First Kink)


2.6

4.6

Unem

ploy

men

t Rat

e

4050

6070

8090

Labo

r For

ce P

artic

ipat

ion

(%)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year


Annual Employment Low Education Above Kink 25 / 167

Labor Force Participation of Married WomenSpousal Earnings Below and Above First Kink (Conditional on Children)


2.6

4.6

Unem

ploy

men

t Rat

e

4050

6070

8090

Labo

r For

ce P

artic

ipat

ion

(%)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year

Spousal Earnings Below Kink Spousal Earnings Above Kink

Annual Employment Low Education 26 / 167

Red Flags

The participation increase for single mothers in 1994-99 is massiveand follows the 1993 EITC reform, but...

I How do we separate EITC effects from the key confounders?

I Why do those with 3+ kids increase participation so muchmore than those with 2 kids after 1993 (but not elsewhere)?

I Why are there no visible effects for married women?

I Why are there no visible effects of the 1975, 1986, 1990, and2009 reforms?

I It is difficult to reconcile the patterns with optimization friction

1993 Reform

27 / 167

Effect of the 1975 Reform

1993 Reform28 / 167


Tax ReductionAct of 1975

2.6

4.6

Une

mpl

oym

ent R

ate

5060

7080

90La

bor F

orce

Par

ticip

atio

n (%

)

68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85Year





46

810

Une

mpl

oym

ent R

ate

5060

7080

90La

bor F

orce

Par

ticip

atio

n (%

)

68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85Year



Labor Force Participation of Single WomenDiD: Difference Between Those With and Without Children


2.6

4.6

Une

mpl

oym

ent R

ate

-10

-50

510

1520

Impa

ct o

n La

bor F

orce

Par

ticip

atio

n (%

)

68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85Year

place


1975 Reform: Conclusions

I No extensive margin effects for single women

I Business cycle variation that coincides with the reform

I This mainly affects the earnings-based measure of participation→ illusory short-term effect of the EITC

I No extensive margin effects for married women eitherMarried Women

I Reconciling these conclusions with Bastian (2018)

I Confounding effects of business cycles (single women) andsecular trends (married women) that vary by children

Bastian (2018)

32 / 167

Effect of the 1993 Reform

1975 Reform33 / 167

Empirical Specification

DiD specification:

Pist =∑j

αj · Y earj=t + β ·Kidsi +∑j

γj · Y earj=t ·Kidsi

+∑j

∑k

δkj · Y earj=t ·W ksj +

∑j

∑k

ζkj · Y earj=t ·Kidsi ·W ksj

+η · Ust + θ · Ust ·Kidsi + νist

where W kst is an indicator for state s having waiver type k in year t

and Ust is the unemployment rate in state s in year t

I Six welfare waivers: termination time limits, work-requirementtime limits, family caps, JOBS exemptions, JOBS sanctions,and earnings disregards

34 / 167


DiD specification:

Pist =∑j



+∑j

∑k


∑j

∑k






35 / 167


DiD specification:

Pist =∑j



+∑j

∑k


∑j

∑k






36 / 167


OBRA93TRA86 OBRA90 PRWORA

8.6

10.6

Unem

ploy

men

t Rat

e

6070

8090

Labo

r For

ce P

artic

ipat

ion

(%)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year


Annual Participation Weekly Employment Annual Employment Low Education With 1 and 2+ Children37 / 167


OBRA93 PRWORA

8.6

10.6

Unem

ploy

men

t Rat

e

-10

-50

510

1520

Impa

ct o

n La

bor F

orce

Par

ticip

atio

n (%

)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year

place



(Controlling for State Unemployment)

OBRA93 PRWORA

8.6

10.6

Unem

ploy

men

t Rat

e

-10

-50

510

1520

Impa

ct o

n La

bor F

orce

Par

ticip

atio

n (%

)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year

Raw Means With Controls



(Controlling for State Unemployment and Welfare Waivers)

OBRA93 PRWORA

8.6

10.6

Unem

ploy

men

t Rat

e

-10

-50

510

1520

Impa

ct o

n La

bor F

orce

Par

ticip

atio

n (%

)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year


Annual Participation Weekly Employment Annual Employment Low Education With 1 and 2+ Children

Any Waiver Approved Any Waiver Implemented 40 / 167

1993 Reform: Conclusions

I The participation increase for single mothers is correlated withunemployment changes and welfare waivers across states

I Controlling for state-level variation in unemployment andwelfare waivers eliminates any significant effect of the EITCbetween 1994-96 (prior to PRWORA)

I A weak test as it absorbs only cross-state effects, not anynational effects

I The drivers of the 1990s participation boom are unidentified,but the patterns are consistent with no effect of the EITC

WFTC

41 / 167

State EITC Supplements

WFTC 42 / 167

State EITC Supplements

I Between 1984-2018, many states instituted EITC supplements

I 28 states currently have EITC supplements

I Many supplements are small or were increased only gradually

I Some states implemented larger reforms

I Define “large reform” as an increase in the state EITC of atleast 20% (refundable) of the federal credit within 3 years

I 8 states had such reforms

43 / 167

States with an EITC Supplement in 1990

Any SupplementNo Supplement

44 / 167



45 / 167



46 / 167



47 / 167


2015

2011

2000

1998

2000

1994

1988

1989

Large ReformAny SupplementNo Supplement

48 / 167

Synthetic Control Approach

I For each state with an EITC supplement, a synthetic controlstate is created from those without a supplement

I I focus on state reforms:

I Introduction of any state EITC supplement

I Large reforms, as defined earlier

I I match on pre-reform variables:

I Labor force participation (level and trend), unemployment rate(level and change), and welfare participation rate

Synthetic States

49 / 167

Specification

DiD specification:

Pst =∑j

αj · Eventj=t + β · Treats +∑j

γj · Eventj=t · Treats

+λs + νst

where Eventj=t are event time indicators, Treats is an indicator forbeing a treatment state, and λs is a state fixed effect

I The specification is run on an unbalanced panel of states overan event window from -10 to +10

50 / 167

Large State EITC Reforms: Event StudyTreatment and Synthetic Control States

Reform

-20

-15

-10

-50

510

1520

Labo

r For

ce P

artic

ipat

ion

(%)

-10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10Year

Treatments Synthetic Controls

All Reforms Annual Participation Weekly Employment Annual Employment

51 / 167

Large State EITC Reforms: Event StudyDiD: Difference Between Treatment and Synthetic Control States

Reform

-20

-15

-10

-50

510

1520

Impa

ct o

n La

bor F

orce

Par

ticip

atio

n (%

)

-10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10Year

place

Placebos All Reforms Annual Participation Weekly Employment Annual Employment

52 / 167

State EITC Supplements: Conclusions

I State EITCs create variation that does not rely on children

I This avoids confounders that vary by children

I But introduces confounders that vary by state→ synthetic control approach

I Most state EITC reforms have been too small for a credibleDiD, but 8 reforms were sizeable

I Evidence from large state EITC reforms:

I No clear evidence of any extensive margin effects

53 / 167

WFTC Effects on the Extensive Margin?

54 / 167

Data

I Main data: Labour Force Survey (LFS):

I Repeated cross-section

I 1992-2017

I Around 400,000 individuals per year

I Alternate data: British Household Panel Survey (BHPS):

I Panel

I 1991-2008

I Started with 10,000 individuals in 1991

55 / 167


DiD specification:

Pirt =∑j



+δ · Urt + ζ · Urt ·Kidsi +Xi · φ+Xi ·Kidsi · ψ + νirt

where Urt is the unemployment rate in region r in year t, and Xi

includes dummies for age, age of youngest child, and education

I Allow for linear, group-specific pre-trend, i.e. residualize Pirt

using linear trend estimated on pre-data

56 / 167


WFTC WTC

4050

6070

8090

100

Labo

r For

ce P

artic

ipat

ion

(%)

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15Year


Low Education Employment (All Edu) Employment (Low Edu)57 / 167


(Normalized)

WFTC WTC

-20

-10

010

2030

Labo

r For

ce P

artic

ipat

ion

(%)

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15Year




WFTC WTC

-10

010

20Im

pact

on

Labo

r For

ce P

artic

ipat

ion

(%)

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15Year

place



(Adding Linear Pre-Trends)

WFTC WTC

-10

010

20Im

pact

on

Labo

r For

ce P

artic

ipat

ion

(%)

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15Year

Raw Means With Pre-Trends



(Controlling for Unemployment and Demographics)

WFTC WTC

-10

010

20Im

pact

on

Labo

r For

ce P

artic

ipat

ion

(%)

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15Year




(Adding Pre-Trend Controls)

WFTC WTC

-10

010

20Im

pact

on

Labo

r For

ce P

artic

ipat

ion

(%)

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15Year

Raw Means With Controls & Pre-Trends


1999 WFTC Reform: Findings and Issues

I The real size of the 1999 WFTC expansion:

I The WFTC expansion was massive in itself, but there wereoffsetting changes from the welfare system

I Still, a sizeable net incentive for the typical single mother(e.g., Blundell & Hoynes 2004)

I The effects on the extensive margin of labor supply:

I No effects on labor force participation

I This holds in both LFS and BHPS BHPS

I Suggestive effects on employment

I DiD effect driven by break in the control group → parallel trendassumption is tenuous

63 / 167

Conclusions

64 / 167

Where Does This Leave Us?

I A consensus view that participation responses can be sizeableI This view is partly grounded in EITC studies

I But no study identifies these responses to a modern bar

I Cross-country puzzle (Kleven 2014)

I Revisiting historical EITC and WFTC reforms, I find no clearevidence of participation responses

I What happened with single mothers in the US in the 1990s?I Maybe a unique combination of EITC reform, welfare reform,

economic upturn, and changing social norms?

I Economic history rather than anything externally valid

65 / 167

Appendix

66 / 167

WTC Maximum Credit Over TimeSingle Women with 2 Children

050

0010

000

1500

020

000

2500

0An

nual

Cre

dit (

USD

)

0 10000 20000 30000 40000 50000 60000Earnings (USD)

EITCWTC w/ childcare subsidyWTC, w/o childcare subsidy

Back67 / 167

WTC Maximum Credit Over TimeIncluding the Child Tax Credit

1 child

2 children3 children

0 children

FIS FC WFTC WTC

010

000

2000

030

000

4000

050

000

Max

imum

Ann

ual C

redi

t (20

17 U

SD)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year

Back

68 / 167

Extensive Margin MeasuresAll Women, 20-50

2.6

4.6

Une

mpl

oym

ent R

ate

4050

6070

80

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year

Employed last weekParticipated last weekEmployed last yearParticipated last year

Back

69 / 167

Extensive Margin MeasuresSingle Women, 20-50

2.6

4.6

Une

mpl

oym

ent R

ate

5060

7080

90

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year


Back

70 / 167

Extensive Margin MeasuresSingle Mothers, 20-50

2.6

4.6

Une

mpl

oym

ent R

ate

5060

7080

90

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year


Back

71 / 167


(Annual Employment)

2.5

4.5

Une

mpl

oym

ent R

ate

5060

7080

9010

0Po

sitiv

e Ea

rnin

gs (%

)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year


LFP72 / 167


(Annual Employment)


2.5

4.5

Une

mpl

oym

ent R

ate

5060

7080

9010

0Po

sitiv

e Ea

rnin

gs (%

)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year


LFP73 / 167


(Annual Employment)

14.9pp 14.9pp


2.5

4.5

Une

mpl

oym

ent R

ate

5060

7080

9010

0Po

sitiv

e Ea

rnin

gs (%

)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year


LFP74 / 167


(Annual Employment)


2.5

4.5

Unem

ploy

men

t Rat

e

5060

7080

9010

0Po

sitive

Ear

ning

s (%

)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year


LFP75 / 167


(Annual Employment)


2.5

4.5

Unem

ploy

men

t Rat

e

5060

7080

9010

0Po

sitive

Ear

ning

s (%

)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year


LFP76 / 167


(Annual Employment)



2.5

4.5

Unem

ploy

men

t Rat

e

5060

7080

9010

0Po

sitive

Ear

ning

s (%

)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year


LFP77 / 167


(Annual Employment)



46

810

Unem

ploy

men

t Rat

e

5060

7080

9010

0Po

sitive

Ear

ning

s (%

)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year


LFP78 / 167

Labor Force Participation of Single WomenBy Number of Children(Annual Employment)


4050

6070

8090

Posit

ive E

arni

ngs

(%)

-1 -.5 0 .5 1

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year


LFP79 / 167



Much larger increaseby those with 3+ kids40

5060

7080

90Po

sitive

Ear

ning

s (%

)

-1 -.5 0 .5 1

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year


LFP80 / 167




4050

6070

8090

Posit

ive E

arni

ngs

(%)

-1 -.5 0 .5 1

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year


LFP81 / 167



And no increasehere either

4050

6070

8090

Posit

ive E

arni

ngs

(%)

-1 -.5 0 .5 1

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year


LFP82 / 167


(Annual Employment)


2.5

4.5

Unem

ploy

men

t Rat

e

4050

6070

8090

Posit

ive E

arni

ngs

(%)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year


LFP 83 / 167


(Annual Employment)


2.5

4.5

Unem

ploy

men

t Rat

e

4050

6070

8090

Posit

ive E

arni

ngs

(%)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year


LFP 84 / 167


(Annual Employment)


2.5

4.5

Unem

ploy

men

t Rat

e

4050

6070

8090

Posit

ive E

arni

ngs

(%)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year


LFP 85 / 167


(Low Education)

2.6

4.6

Une

mpl

oym

ent R

ate

5060

7080

9010

0La

bor F

orce

Par

ticip

atio

n (%

)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year


All Educations86 / 167


(Low Education)


2.6

4.6

Une

mpl

oym

ent R

ate

5060

7080

9010

0La

bor F

orce

Par

ticip

atio

n (%

)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year




(Low Education)

20.8pp 16.8pp


2.6

4.6

Une

mpl

oym

ent R

ate

5060

7080

9010

0La

bor F

orce

Par

ticip

atio

n (%

)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year




(Low Education)


2.6

4.6

Unem

ploy

men

t Rat

e

5060

7080

9010

0La

bor F

orce

Par

ticip

atio

n (%

)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year




(Low Education)


2.6

4.6

Unem

ploy

men

t Rat

e

5060

7080

9010

0La

bor F

orce

Par

ticip

atio

n (%

)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year




(Low Education)



2.6

4.6

Unem

ploy

men

t Rat

e

5060

7080

9010

0La

bor F

orce

Par

ticip

atio

n (%

)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year




(Low Education)



46

810

Unem

ploy

men

t Rat

e

5060

7080

9010

0La

bor F

orce

Par

ticip

atio

n (%

)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year




(Low Education)


4050

6070

8090

Labo

r For

ce P

artic

ipat

ion

(%)

-1 -.5 0 .5 1

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year




(Low Education)


Much larger increaseby those with 3+ kids

4050

6070

8090

Labo

r For

ce P

artic

ipat

ion

(%)

-1 -.5 0 .5 1

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year




(Low Education)



4050

6070

8090

Labo

r For

ce P

artic

ipat

ion

(%)

-1 -.5 0 .5 1

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year




(Low Education)


And no increasehere either40

5060

7080

90La

bor F

orce

Par

ticip

atio

n (%

)

-1 -.5 0 .5 1

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year




(Low Education)


2.6

4.6

Unem

ploy

men

t Rat

e

4050

6070

8090

Labo

r For

ce P

artic

ipat

ion

(%)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year


All Educations 97 / 167


(Low Education)


2.6

4.6

Unem

ploy

men

t Rat

e

4050

6070

8090

Labo

r For

ce P

artic

ipat

ion

(%)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year




(Low Education)


2.6

4.6

Unem

ploy

men

t Rat

e

4050

6070

8090

Labo

r For

ce P

artic

ipat

ion

(%)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year



Labor Force Participation of Married WomenWith and Without Children (Spousal Earnings Above First Kink)


2.6

4.6

Unem

ploy

men

t Rat

e

4050

6070

8090

Labo

r For

ce P

artic

ipat

ion

(%)

68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18Year


Back 100 / 167


(Annual Employment)


2.6

4.6

Une

mpl

oym

ent R

ate

5060

7080

90Po

sitiv

e Ea

rnin

gs (%

)

68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85Year


LFP101 / 167


(Annual Employment)


46

810

Une

mpl

oym

ent R

ate

5060

7080

90Po

sitiv

e Ea

rnin

gs (%

)

68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85Year


LFP102 / 167


(Annual Employment)


46

810

Une

mpl

oym

ent R

ate

-10

-50

510

1520

Impa

ct o

n Po

sitiv

e Ea

rnin

gs (%

)

68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85Year

DiD Unemployment

LFP103 / 167


(Low Education)


2.6

4.6

Une

mpl

oym

ent R

ate

5060

7080

90La

bor F

orce

Par

ticip

atio

n (%

)

68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85Year




(Low Education)


46

810

Une

mpl

oym

ent R

ate

5060

7080

90La

bor F

orce

Par

ticip

atio

n (%

)

68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85Year




(Low Education)


2.6

4.6

Une

mpl

oym

ent R

ate

-10

-50

510

15Im

pact

on

Labo

r For

ce P

artic

ipat

ion

(%)

68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85Year

place



(Spousal Earnings Below First Kink)


2.6

4.6

Une

mpl

oym

ent R

ate

3545

5565

7585

Labo

r For

ce P

artic

ipat

ion

(%)

68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85Year


Back107 / 167


(Spousal Earnings Above First Kink)


2.6

4.6

Une

mpl

oym

ent R

ate

3545

5565

7585

Labo

r For

ce P

artic

ipat

ion

(%)

68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85Year


Back108 / 167

Labor Force Participation of Married WomenTriple-Diff: With and Without Children, Below and Above Kink


2.6

4.6

Une

mpl

oym

ent R

ate

-10

-50

510

1520

Impa

ct o

n La

bor F

orce

Par

ticip

atio

n (%

)

68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85Year

place

Back109 / 167

Bastian ReplicationSingle Women and Married Women with Spousal Earnings Below EITC Exhaustion


2.6

4.6

Une

mpl

oym

ent R

ate

4050

6070

8090

Posi

tive

Earn

ings

(%)

68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85Year


Back110 / 167

Refining the SpecificationSingle Women and Married Women with Spousal Earnings Below First EITC Kink


2.6

4.6

Une

mpl

oym

ent R

ate

4050

6070

8090

Posi

tive

Earn

ings

(%)

68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85Year


Back111 / 167

Adding the Unemployment SeriesSingle Women and Married Women with Spousal Earnings Below First EITC Kink


46

810

Une

mpl

oym

ent R

ate

4050

6070

8090

Posi

tive

Earn

ings

(%)

68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85Year


Back112 / 167

Splitting the Sample

Single Women Married Women(Spousal Earnings Below First Kink)


46

810

Une

mpl

oym

ent R

ate

4050

6070

8090

Posi

tive

Earn

ings

(%)

68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85Year



46

810

Une

mpl

oym

ent R

ate

4050

6070

8090

Posi

tive

Earn

ings

(%)

68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85Year


Back 113 / 167

Married Women Placebo Test

Married Women Married Women(Spousal Earnings Below First Kink) (Spousal Earnings Above First Kink)


46

810

Une

mpl

oym

ent R

ate

4050

6070

8090

Posi

tive

Earn

ings

(%)

68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85Year



46

810

Une

mpl

oym

ent R

ate

4050

6070

8090

Posi

tive

Earn

ings

(%)

68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85Year


Back 114 / 167


(Annual Participation)


8.6

10.6

Unem

ploy

men

t Rat

e

6575

8595

Labo

r For

ce P

artic

ipat

ion

(%)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year


Weekly Participation115 / 167



OBRA93 PRWORA

8.6

10.6

Unem

ploy

men

t Rat

e

-10

-50

510

1520

Impa

ct o

n La

bor F

orce

Par

ticip

atio

n (%

)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year

place



(Annual Participation, Unemployment Controls)

OBRA93 PRWORA

8.6

10.6

Unem

ploy

men

t Rat

e

-10

-50

510

1520

Impa

ct o

n La

bor F

orce

Par

ticip

atio

n (%

)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year




(Annual Participation, Unemployment and Welfare Waiver Controls)

OBRA93 PRWORA

8.6

10.6

Unem

ploy

men

t Rat

e

-10

-50

510

1520

Impa

ct o

n La

bor F

orce

Par

ticip

atio

n (%

)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year


Weekly Participation

118 / 167


(Weekly Employment)


8.6

10.6

Unem

ploy

men

t Rat

e

5565

7585

Empl

oym

ent R

ate

(%)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year




(Weekly Employment)

OBRA93 PRWORA

8.6

10.6

Unem

ploy

men

t Rat

e

-10

-50

510

1520

Impa

ct o

n Em

ploy

men

t Rat

e (%

)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year

place



(Weekly Employment, Unemployment Controls)

OBRA93 PRWORA

8.6

10.6

Unem

ploy

men

t Rat

e

-10

-50

510

1520

Impa

ct o

n Em

ploy

men

t Rat

e (%

)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year




(Weekly Employment, Unemployment and Welfare Waiver Controls)

OBRA93 PRWORA

8.6

10.6

Unem

ploy

men

t Rat

e

-10

-50

510

1520

Impa

ct o

n Em

ploy

men

t Rat

e (%

)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year



122 / 167


(Annual Employment)


8.6

10.6

Unem

ploy

men

t Rat

e

6070

8090

Posit

ive E

arni

ngs

(%)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year




(Annual Employment)

OBRA93 PRWORA

8.6

10.6

Unem

ploy

men

t Rat

e

-10

-50

510

1520

Impa

ct o

n Po

sitive

Ear

ning

s (%

)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year

place



(Annual Employment, Unemployment Controls)

OBRA93 PRWORA

8.6

10.6

Unem

ploy

men

t Rat

e

-10

-50

510

1520

Impa

ct o

n Po

sitive

Ear

ning

s (%

)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year




(Annual Employment, Unemployment and Welfare Waiver Controls)

OBRA93 PRWORA

8.6

10.6

Unem

ploy

men

t Rat

e

-10

-50

510

1520

Impa

ct o

n Po

sitive

Ear

ning

s (%

)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year



126 / 167


(Low Education)


8.6

10.6

Unem

ploy

men

t Rat

e

6070

8090

Labo

r For

ce P

artic

ipat

ion

(%)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year




(Low Education)

OBRA93 PRWORA

8.6

10.6

Unem

ploy

men

t Rat

e

-10

-50

510

1520

Impa

ct o

n La

bor F

orce

Par

ticip

atio

n (%

)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year

place



(Low Education, Unemployment Controls)

OBRA93 PRWORA

8.6

10.6

Unem

ploy

men

t Rat

e

-10

-50

510

1520

Impa

ct o

n La

bor F

orce

Par

ticip

atio

n (%

)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year




(Low Education, Unemployment and Welfare Waiver Controls)

OBRA93 PRWORA

8.6

10.6

Unem

ploy

men

t Rat

e

-10

-50

510

1520

Impa

ct o

n La

bor F

orce

Par

ticip

atio

n (%

)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year



Labor Force Participation of Single WomenWith 1 and 2+ Children


8.6

10.6

Unem

ploy

men

t Rat

e

5565

7585

Labo

r For

ce P

artic

ipat

ion

(%)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year

1 child 2+ children

With and Without Children131 / 167

Labor Force Participation of Single WomenDiD: Difference Between Those With 1 and 2+ Children

OBRA93 PRWORA

8.6

10.6

Unem

ploy

men

t Rat

e

-10

-50

510

1520

Impa

ct o

n La

bor F

orce

Par

ticip

atio

n (%

)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year

place



(Unemployment Controls)

OBRA93 PRWORA

8.6

10.6

Unem

ploy

men

t Rat

e

-10

-50

510

1520

Impa

ct o

n La

bor F

orce

Par

ticip

atio

n (%

)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year




(Unemployment and Welfare Waiver Controls)

OBRA93 PRWORA

8.6

10.6

Unem

ploy

men

t Rat

e

-10

-50

510

1520

Impa

ct o

n La

bor F

orce

Par

ticip

atio

n (%

)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year




(Any Waiver Approved, Unemployment and Welfare Waiver Controls)

OBRA93 PRWORA

8.6

10.6

Unem

ploy

men

t Rat

e

-10

-50

510

1520

Impa

ct o

n La

bor F

orce

Par

ticip

atio

n (%

)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year


All Waivers

135 / 167


(Any Waiver Implemented, Unemployment and Welfare Waiver Controls)

OBRA93 PRWORA

8.6

10.6

Unem

ploy

men

t Rat

e

-10

-50

510

1520

Impa

ct o

n La

bor F

orce

Par

ticip

atio

n (%

)

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03Year


All Waivers

136 / 167

Synthetic StatesI California: 40% Alabama, 29% Arizona, 27% Nevada, 3% Montana, 2%

Washington

I Connecticut: 26% Missouri, 14% South Dakota, 9% Texas, 9%Tennessee, 7% Alaska, 35% other states

I DC: 54% Alaska, 46% Kentucky

I Minnesota: 61% Pennsylvania, 39% Tennessee

I New Jersey: 25% Kentucky, 21% Alaska, 18% New Hampshire, 13%Arizona, 11% Montana, 12% other states

I New York: 51% Pennsylvania, 49% West Virginia

I Vermont: 61% Washington, 31% Arkansas, 8% Pennsylvania

I Wisconsin: 53% Washington, 27% Pennsylvania, 20% Missouri

Back

137 / 167

All State EITC Introductions: Event StudyTreatment and Synthetic Control States

Reform

-20

-15

-10

-50

510

1520

Labo

r For

ce P

artic

ipat

ion

(%)

-10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10Year


Large Reforms

138 / 167

All State EITC Introductions: Event StudyDiD: Difference Between Treatment and Synthetic Control States

Reform

-20

-15

-10

-50

510

1520

Impa

ct o

n La

bor F

orce

Par

ticip

atio

n (%

)

-10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10Year

place

Large Reforms

139 / 167



Reform

-20

-15

-10

-50

510

1520

Labo

r For

ce P

artic

ipat

ion

(%)

-10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10Year



140 / 167



Reform

-20

-15

-10

-50

510

1520

Impa

ct o

n La

bor F

orce

Par

ticip

atio

n (%

)

-10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10Year

place


141 / 167


(Weekly Employment)

Reform

-20

-15

-10

-50

510

1520

Empl

oym

ent R

ate

(%)

-10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10Year



142 / 167


(Weekly Employment)

Reform

-20

-15

-10

-50

510

1520

Impa

ct o

n Em

ploy

men

t Rat

e (%

)

-10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10Year

place


143 / 167


(Annual Employment)

Reform

-20

-15

-10

-50

510

1520

Empl

oym

ent R

ate

(%)

-10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10Year



144 / 167


(Annual Employment)

Reform

-20

-15

-10

-50

510

1520

Impa

ct o

n Em

ploy

men

t Rat

e (%

)

-10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10Year

place


145 / 167

Large State EITC Reforms: Event StudyActual DiD Estimates vs Placebo DiD Estimates

Reform

-40

-30

-20

-10

010

2030

40

-10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10Year

Actual Estimates Placebo Estimates

Back

146 / 167


(Low Education)

WFTC WTC

4050

6070

8090

100

Labo

r For

ce P

artic

ipat

ion

(%)

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15Year




(Low Education, Normalized)

WFTC WTC

-20

-10

010

2030

Labo

r For

ce P

artic

ipat

ion

(%)

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15Year




(Low Education)

WFTC WTC

-10

010

20Im

pact

on

Labo

r For

ce P

artic

ipat

ion

(%)

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15Year

place



(Low Education, Adding Linear Pre-Trends)

WFTC WTC

-10

010

20Im

pact

on

Labo

r For

ce P

artic

ipat

ion

(%)

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15Year




(Low Education, Controlling for Unemployment and Demographics)

WFTC WTC

-10

010

20Im

pact

on

Labo

r For

ce P

artic

ipat

ion

(%)

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15Year




(Low Education, Adding Pre-Trend Controls)

WFTC WTC

-10

010

20Im

pact

on

Labo

r For

ce P

artic

ipat

ion

(%)

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15Year



Labor Force Participation of Single WomenWith and Without Children(Employment, All Edu)

WFTC WTC

4050

6070

8090

100

Empl

oyem

ent R

ate

(%)

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15Year


LFP153 / 167


(Employment, All Educations, Normalized)

WFTC WTC

-20

-10

010

2030

Empl

oyem

ent R

ate

(%)

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15Year


LFP154 / 167


(Employment, All Educations)

WFTC WTC

-10

010

20Im

pact

on

Empl

oym

ent R

ate

(%)

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15Year

place

LFP155 / 167


(Employment, All Educations, Adding Linear Pre-Trends)

WFTC WTC

-10

010

20Im

pact

on

Empl

oym

ent R

ate

(%)

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15Year


LFP156 / 167


(Employment, All Educations, Controlling for Unemployment and Demographics)

WFTC WTC

-10

010

20Im

pact

on

Empl

oym

ent R

ate

(%)

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15Year


LFP157 / 167


(Employment, All Educations, Adding Pre-Trend Controls)

WFTC WTC

-10

010

20Im

pact

on

Empl

oym

ent R

ate

(%)

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15Year


LFP158 / 167


(Employment, Low Education)

WFTC WTC

3040

5060

7080

90Em

ploy

emen

t Rat

e (%

)

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15Year


LFP (All Edu)159 / 167


(Employment, Low Education, Normalized)

WFTC WTC

-20

-10

010

2030

Empl

oyem

ent R

ate

(%)

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15Year




(Employment, Low Education)

WFTC WTC

-10

010

20Im

pact

on

Empl

oym

ent R

ate

(%)

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15Year

place



(Employment, Low Education, Adding Linear Pre-Trends)

WFTC WTC

-10

010

20Im

pact

on

Empl

oym

ent R

ate

(%)

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15Year




(Employment, Low Education, Controlling for Unemployment and Demographics)

WFTC WTC

-10

010

20Im

pact

on

Empl

oym

ent R

ate

(%)

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15Year




(Employment, Low Education, Adding Pre-Trend Controls)

WFTC WTC

-10

010

20Im

pact

on

Empl

oym

ent R

ate

(%)

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15Year




(BHPS, Normalized)

WFTC WTC

-20

-10

010

20La

bor F

orce

Par

ticip

atio

n (%

)

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08Year


Back165 / 167


(BHPS)

WFTC WTC

-20

-10

010

20La

bor F

orce

Par

ticip

atio

n (%

)

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08Year

place

Back166 / 167


(BHPS, Controlling for Demographics)

WFTC WTC

-20

-10

010

20La

bor F

orce

Par

ticip

atio

n (%

)

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08Year


Back167 / 167

Documents

Taxation and Labor Force Participation: The EITC Reconsideredsaez/course131/KlevenEITCSlides.pdf · The Earned Income Tax Credit (EITC) I A means-tested transfer that is conditional