The Persistent Reduction in Poverty from Filing a Tax Return

Shanthi Ramnath and Patricia K. Tong

American Economic Journal: Economic Policy, 2017, vol. 9, issue 4, 367-94

Abstract: Low-income households not required to file often fail to receive benefits provided through the tax code. In 2008, the US government made people with at least $3,000 in earnings eligible for a stimulus payment if they filed a tax return. Using eligibility for this credit as an instrument for filing, we find with administrative data that filing reduces the probability of living in poverty in future years, which is a result of increases in EITC claiming, workforce attachment, and earnings. These results demonstrate that temporary incentives to participate in the tax system have persistent real effects on economic activity and poverty.

JEL-codes: H24 I32 I38 (search for similar items in EconPapers)
Date: 2017
Note: DOI: 10.1257/pol.20150486
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Citations: View citations in EconPapers (8)

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