The EITC, Tax Refunds, and Unemployment Spells

Sara LaLumia

American Economic Journal: Economic Policy, 2013, vol. 5, issue 2, 188-221

Abstract: The earned income tax credit generates large average tax refunds for low-income parents, and these refunds are distributed in a narrow time frame. I rely on this plausibly exogenous source of variation in liquidity to investigate the effect of cash on hand on unemployment duration. Among EITC-eligible women, unemployment spells beginning just after tax refund receipt last longer than unemployment spells beginning at other times of year. There is no evidence that tax refund receipt is associated with longer unemployment duration for men, or that the longer durations for women are associated with higher-quality subsequent job matches. (JEL H24, J64)

JEL-codes: H24 J64 (search for similar items in EconPapers)
Date: 2013
Note: DOI: 10.1257/pol.5.2.188
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Citations: View citations in EconPapers (30)

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Working Paper: The EITC, Tax Refunds, and Unemployment Spells (2011)
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