Estimating the Short-term Effects of the Earned Income Tax Credit on Child Health

Abstract

The earned income tax credit (EITC) is the largest U.S. poverty alleviation program, yet few studies examine its effects on the health of recipients' children. We employed quasi-experimental techniques to test the hypothesis that EITC refund receipt is associated with short-term improvements in child health. The data set included children surveyed in the Third National Health and Nutrition Examination Survey (N=7,444). We employed a difference-in-differences approach, exploiting the seasonal nature of EITC refund receipt. We compared children of EITC-eligible families interviewed immediately after refund receipt (February-April) with those interviewed during other months (May-January), differencing out seasonal variation among non-EITC-eligible families. We examined outcomes that were likely to be affected immediately after refund receipt, including general health, nutrition, metabolic and inflammatory biomarkers, and test scores. There were improvements in physician-reported overall health after refund receipt, but no changes in infection, serum metabolic or inflammatory markers, or test scores, and contradictory findings for food insufficiency. In summary, EITC refunds are not strongly associated with most short-term health outcomes among recipients' children, although numerous previous studies have demonstrated impacts on longer-term outcomes. This highlights the importance of examining the effects of public policies on beneficiaries and their children using varying study designs.