The earned income tax credit, mental health, and happiness

Healthy Communities Research Institute, Department of Political Science
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  3. The earned income tax credit, mental health, and happiness
Author(s)
Abstract
We study the impact of the earned income tax credit (EITC) on various measures of subjective well-being (SWB) using the National Survey of Families and Households (NSFH) to estimate intent-to-treat effects of the EITC expansion embedded in the 1990 Omnibus Budget Reconciliation Act. We use a difference-in-differences framework that compares the pre-and post-expansion SWB-changes of women likely eligible for the EITC (low-skilled mothers of working age) to the SWB-changes of a comparison group that is likely ineligible (low-skilled, childless women of working age). Our results suggest that the EITC expansion generated sizeable SWB-improvements in the three major categories of SWB identified in the literature. The NSFH is one of few datasets containing all three major categories of SWB. Subgroup analyses by marital status suggest that improvements accrued more to married than unmarried mothers. Relative to their childless counterparts, married mothers experienced a 15.7% decrease in depression symptomatology (experiential SWB), a 4.4% increase in happiness (evaluative SWB), and a 10.1% increase in self-esteem (eudemonic SWB). We also present specification checks that increase confidence that the observed SWB-effects are explained by the OBRA90 EITC expansion. Lastly, we explore mechanisms that may explain the differential impact of the EITC expansion by marital status. (C) 2015 Elsevier B.V. All rights reserved.
Format
Article
Identifier(s)
10.1016/j.jebo.2015.11.004
Publication Date
2016-06
Publication Title
Journal of Economic Behavior & Organization
Publisher
Elsevier
Volume
126
First Page
18
Last Page
38
Keywords
Subject
Rights
http://rightsstatements.org/vocab/InC/1.0/
Community
Healthy Communities Research Institute
Department of Political Science
Permalink https://oaks.kent.edu/hcri/earned-income-tax-credit-mental-health-and-happiness
Boyd-Swan, C., Herbst, C., Ifcher, J., & Zarghamee, H. (2016). The earned income tax credit, mental health, and happiness (1–). Journal of Economic Behavior & Organization. https://doi.org/http://dx.doi.org/10.1016/j.jebo.2015.11.004
Boyd-Swan, Casey, Chris Herbst, John Ifcher, and Homa Zarghamee. 2016. “The Earned Income Tax Credit, Mental Health, and Happiness”. Journal of Economic Behavior & Organization. https://doi.org/http://dx.doi.org/10.1016/j.jebo.2015.11.004.
Boyd-Swan, Casey, et al. The Earned Income Tax Credit, Mental Health, and Happiness. Journal of Economic Behavior & Organization, June 2016, https://doi.org/http://dx.doi.org/10.1016/j.jebo.2015.11.004.