PUBLICATIONS AND PAPERS UNDER REVIEW
"The Long-Term Impact of the Earned Income Tax Credit on Children’s Education and Employment Outcomes" with Kathy Michelmore
Journal of Labor Economics (2018, 36(4), 1127-1163)
Abstract: Using 4 decades of variation in the federal and state EITC, we estimate the impact of exposure to EITC expansions in childhood on education and employment outcomes in adulthood. Reduced-form results suggest that an additional $1,000 in EITC exposure when a child is 13–18 years old increases the likelihood of completing high school (1.3%), completing college (4.2%), and being employed as a young adult (1.0%) and earnings by 2.2%. Our analysis reveals that the primary channel through which the EITC improves these outcomes is increases in pretax family earnings.
Ungated version (with Appendix)
Media: Brookings, Tax Policy Center, National Affairs, Biden Forum, Brad DeLong, Medium, Chalkbeat
“The Rise of Working Mothers and the 1975 Earned Income Tax Credit”
American Economic Journal: Economic Policy (2020, 12(3), 44-75)
Abstract: The rise of working mothers radically changed the U.S. economy and the role of women in society. In one of the first studies of the 1975 introduction of the Earned Income Tax Credit, I find that this program increased maternal employment by 6 percent, representing one million mothers and an elasticity of 0.58. The EITC may help explain why the U.S. has long had such a high fraction of working mothers despite few childcare subsidies or parental-leave policies. I also find evidence that this influx of working mothers affected social attitudes and led to higher approval of working women.
Ungated version (with Appendix)
Media: AEA Chart of the Week, Brookings
“Do EITC Expansions Pay for Themselves? Effects on Tax Revenue and Public Assistance Spending” with Maggie R. Jones
Journal of Public Economics (2021, 1(196), 104355)
Abstract: This paper calculates the EITC's net cost by estimating effects, both direct and through recipients' behavioral changes, on tax revenue and government transfer spending. We show that the EITC increases labor supply and income, thereby increasing the taxes households pay and reducing the government transfer payments they receive. Using linked IRS--CPS data and several EITC policy changes, and focusing on married and unmarried women, we find that the EITC's net cost is only 17 percent of the ($70 billion) budgetary cost over a one-year period. Although the EITC is one of the U.S.’s largest and most important public assistance programs, the EITC is actually one of the U.S.’s least expensive anti-poverty programs.
Ungated version (with Appendix)
Media: The Economist, The Brookings Institution, Mother Jones, National Review, Poverty Research IRP, Council on Economic Policies, Confessions of a Supply-Side Liberal, Marginal Revolution
“How Did Safety-Net Reform Affect Early Adulthood among Adolescents from Low-Income Families?” with Jeff Grogger and Luorao Bian
National Tax Journal (2021, 74(3), 825-865)
Abstract: In the 1990s, the US safety net was substantially reformed. We ask how those reforms collectively affected early-career outcomes among youths who were teens when the reforms took effect. We consider employment, safety-net participation, marriage, and childbearing between the ages of 18 and 32. We take a dif-in-dif approach, tracking adolescents from two generations roughly 20 years apart. In each generation, we compare two groups, one of which was more likely to have been affected by safety-net reform than the other. We find evidence that safety-net reform increased women’s labor supply and decreased marriage.
“The EITC and Maternal Time Use: More Time Working and Less Time with Kids?” with Lance Lochner
Journal of Labor Economics (2022, 40(3), 573-611)
Ungated version (with Appendix)
Abstract: Parents spend considerable sums investing in their children's development, with their own time among the most important forms of investment. Given well-documented effects of the Earned Income Tax Credit (EITC) on maternal labor supply, it is natural to ask how the EITC affects other time allocation decisions, especially time with children. We use the American Time Use Surveys to study the effects of EITC expansions since 2003 on time devoted to a broad array of activities, with considerable attention to the amount and nature of time spent with children. Our results confirm prior evidence that the EITC increases maternal work and reduces time devoted to home production and leisure. More novel, we show that the EITC also reduces time spent with children; however, almost none of the reduction comes from time devoted to ``investment'' activities. Effects are concentrated among socioeconomically disadvantaged mothers, especially those that are unmarried. Results are also most apparent for mothers of young children. Altogether, our results suggest that the increased work associated with EITC expansions over time has done little to reduce the time mothers devote to active learning and development activities with their children.
“How Did Safety Net Reform Affect the Education of Adolescents from Low-Income Families?” with Jeff Grogger and Luorao Bian
Labour Economics (2022, 1(77), 102031)
Abstract: Roughly 25 years ago, the US safety net was substantially reformed. Here we ask how those reforms affected the educational attainment of youths who were teens at the time those reforms took place. We take a dif-in-dif approach, following adolescents from two generations roughly 20 years apart. In each generation, we compare two groups, one which was more likely to have been affected by safety-net reform, and one which was less likely to have been affected. Under some assumptions, our approach identifies the joint, or bundled, effects of the constituent policy changes that make up safety-net reform. We find evidence that safety-net reform may have reduced educational attainment for women, and had small positive effects on education for men. We offer suggestions as to why our findings differ from those of previous studies of the components of safety net reform.
“Overcoming Credit Constraints and Migrating Out of Rural and Distressed America” with Dan Black
Journal of Public Economics (Accepted)
Abstract: There is a strong and growing interest in helping families move to areas with higher economic opportunity. We exploit variation in the EITC to examine how relaxing credit constraints affects migration, with a focus on women from rural and economically distressed areas. We nd that relaxing credit constraints increases migration out of rural and distressed areas, to areas with higher labor force participation and lower unemployment rates. Many of these moves occur across counties or commuting zones, but we nd no effect on moving across states. We also find decreases in living doubled up with another family, and reductions in commute length. We are the first to show that the EITC relaxes credit constraints and helps women move to economic opportunity.
“Tax Credits in Rural and Economically Distressed Areas: More Bang Per Buck?”
International Tax and Public Finance (Forthcoming)
Abstract: Numerous papers show that Earned Income Tax Credit (EITC) expansions have increased maternal labor supply, but little is known about how this effect differs by geography or metropolitan status. Using various datasets and exploiting several EITC expansions, I find that the EITC consistently had larger positive effects on the labor supply of unmarried mothers in rural and economically distressed areas. Among married mothers, I find small negative effects in suburban and urban areas and small positive effects in rural areas. I also replicate and extend previous EITC research to show that these effects hold for EITC expansions spanning 1975 to the 2010s.
“How Would a Permanent 2021 Child Tax Credit Expansion Affect Poverty and Employment?”
National Tax Journal (Forthcoming)
Abstract: There is strong disagreement over how a permanent version of the 2020-to-2021 Child Tax Credit (CTC) change would impact poverty and employment. Previous research has used different approaches and concluded that a permanent CTC would lead between 0.3 and 1.5 million parents to stop working. I am the first to show how different elasticity assumptions affect both the predicted impact on parental employment and child poverty, and to decompose these effects by family type. Using CPS and ACS data, my preferred approach predicts that a permanent CTC would lead (1) 354,000--367,000 parents to stop working, (2) to a 28--30% decrease in child poverty, and (3) to a 43--49% decrease in deep child poverty. A permanent CTC would pull 3.0--3.1 million kids out of poverty and 1.3--1.5 million kids out of deep poverty. I show how different elasticities affect these estimates. Even in the unlikely scenario where unmarried mothers have an elasticity of 2.0 and all other parents have an elasticity of 0.25, child poverty would still fall by 20% (representing 2 million kids) and deep child poverty would fall by 30% (representing 1 million kids). I conclude that a permanent version of the 2021 CTC would reduce poverty and deep poverty by more than the 2020 CTC and Earned Income Tax Credit combined.
Media: CNBC, Niskanen Center
“The EITC and Divorced Mothers: Delaying Remarriage to Find a Better Spouse?” with Ze Song
Abstract: Previous research looking at the EITC's impact on marriage has found mixed results. We examine remarriage decisions of divorced mothers and traits of their spouses. Using four decades of panel data, we find each $1,000 increase in the maximum available EITC reduces remarriage within 1-10 years by 1.5-2 percentage points (or 6-8%). Results are robust to various controls and are largest for younger mothers. We also find precise null effects on first marriages and a small positive effect on first divorces. Finally, we find suggestive evidence that delayed remarriage allows mothers to find spouses with more education and higher income.
WORK IN PROGRESS
“Does Working Cause Women To Vote Less and Become More Politically Conservative?”
Abstract: While the correlation between working and voting is positive, I provide some of the first evidence that the causal relationship for individuals is negative. Instrumenting for working using EITC expansions and welfare reform, I find that working women are less likely to vote and become more politically conservative. Consistent with these effects, I find decreases in being registered to vote, civic participation, and political knowledge, and increased preferences for conservative government policies. Effects are driven by younger, White, lower-educated mothers, that did not have a working mother growing up, and are consistent across four data sources that span five decades. Overall, working leads to more votes for Republicans and less votes for Democrats. While recent decades have seen more and more women voting Democrat, even more women would have voted Democrat if not for decades of pro-work public policy targeting lower-income mothers.
“The Rise of Joint Custody and the Decline of U.S. Migration”
“Attitudes Towards Working Women and World War II”
RESTING PAPERS
"Unintended Consequences? More Marriage, More Children, and the EITC"
Abstract: The EITC provides a ``marriage bonus'' to some couples but a ``marriage penalty'' to others: the average incentive is theoretically ambiguous, has changed over time, and existing empirical evidence has been mixed. The EITC also encourages some households to have more children but others to have less. Using over 30 years of household panel data, I find that federal and state EITC expansions increase marriage and fertility, and decrease non-marital cohabitation. These results imply that some estimates in the EITC literature may be biased, since endogenous switching from unmarried to married or increasing fertility would violate the stable-group-composition condition required by difference in differences.
Twitter: @jacobbastian25