 The EITC and the labor supply of adult dependents: direct effects and family income effectsReview of Economics of the Household, 2018, vol. 16, issue 3, No 9, 807 pages Abstract: Abstract Tax data suggest that the population of adult dependents—adults relying on the support of others for the majority of their financial needs—has more than doubled over the last decade. However, little is known about how taxes affect the labor supply decisions of this population. This paper provides an initial investigation, studying the impact of the Earned Income Tax Credit (EITC) expansions of the early 1990s on the labor supply of adult dependents living with their relatives. I find that dependent individuals who were not a part of the nuclear family responded to the EITC expansions, increasing labor force participation by about 5 percentage points. For adult children, I show that the absence of a net response is likely due to an unexpected consequence of the EITC: expanded family credits led to a decrease in their labor force participation. Keywords: EITC; Labor supply; OBRA 1993; Dependents (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:kap:reveho:v:16:y:2018:i:3:d:10.1007_s11150-017-9370-4 Ordering information: This journal article can be ordered from DOI: 10.1007/s11150-017-9370-4 Access Statistics for this article Review of Economics of the Household is currently edited by Shoshana Grossbard More articles in Review of Economics of the Household from Springer |
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