Effect of expanding the earned income tax credit to Americans without dependent children on psychological distress

Emilie Courtin, Heidi L Allen, Lawrence Katz, Cynthia Miller, Kali Aloisi and Peter A Muennig

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Antipoverty policies have the potential to improve mental health. We conducted a randomized trial (Paycheck Plus Health Study Randomized Controlled Trial, New York, New York) to investigate whether a 4-fold increase in the Earned Income Tax Credit for low-income Americans without dependent children would reduce psychological distress relative to the current federal credit. Between 2013 and 2014, a total of 5,968 participants were recruited; 2,997 were randomly assigned to the treatment group and 2,971 were assigned to the control group. Survey data were collected 32 months postrandomization (n = 4,749). Eligibility for the program increased employment by 1.9 percentage points and after-bonus earnings by 6% ($635/year), on average, over the 3 years of the study. Treatment was associated with a marginally statistically significant decline in psychological distress, as measured by the 6-item Kessler Psychological Distress Scale, relative to the control group (score change = −0.30 points, 95% confidence interval (CI): −0.63, 0.03; P = 0.072). Women in the treated group experienced a half-point reduction in psychological distress (score change = −0.55 points, 95% CI: −0.97, −0.13; P = 0.032), and noncustodial parents had a 1.36-point reduction (95% CI: −2.24, −0.49; P = 0.011). Expansion of a large antipoverty program to individuals without dependent children reduced psychological distress for women and noncustodial parents—the groups that benefitted the most in terms of increased after-bonus earnings.

Keywords: Earned Income Tax Credit; psychological distress; randomized controlled trials; social experiments (search for similar items in EconPapers)
JEL-codes: H24 I12 I38 (search for similar items in EconPapers)
Date: 2021-06-04
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Published in American Journal of Epidemiology, 4, June, 2021, 191(8), pp. 1444 - 1452. ISSN: 0002-9262

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