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  7. Do Single Mothers in the United States use the Earned Income Tax Credit to Reduce Unsecured Debt?

Do Single Mothers in the United States use the Earned Income Tax Credit to Reduce Unsecured Debt?

File(s)
working_paper11-30.pdf (635.05 KB)
NPC working paper
Permanent Link(s)
https://hdl.handle.net/1813/34516
https://hdl.handle.net/1813/34516
https://hdl.handle.net/1813/34516
Collections
University of Michigan Node
Author
Shaefer, H. Luke
Song, Xiaoqing
Williams Shanks, Trina R.
Abstract

The Earned Income Tax Credit (EITC) is a refundable credit for low-income workers that is mainly targeted at families with children. This study uses the Survey of Income and Program Participation’s (SIPP) topical modules on Assets & Liabilities to examine the effects of EITC expansions during the early 1990s on the unsecured debt of the households of single mothers. We use two difference-in-differences comparisons over the study period 1988 to 1999, first comparing single mothers to single childless women, and then comparing single mothers with two or more children to single mothers with exactly one child. In both cases we find that the EITC expansions are associated with a relative decline in the unsecured debt of affected households of single mothers. This suggests that single mothers may have used part of their EITC to limit the growth of their unsecured debt during this period.

Sponsorship
#1 U01AE000002-02 from the U.S. Department of
Health and Human Services, NSF # 1131500
Date Issued
2011-10
Publisher
National Poverty Center
Keywords
Social Welfare Programs and Policies
Related Version
Primary version available from the National Poverty Center at the University of Michigan
Previously Published as
National Poverty Center Working Paper Series   #11 – 30
Type
report

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