Teaching the Tax Code: Earnings Responses to an Experiment with EITC Recipients

Raj Chetty and Emmanuel Saez

No 14836, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper tests whether providing information about the Earned Income Tax Credit (EITC) affects EITC recipients' earnings decisions. We conducted a randomized experiment with 43,000 EITC recipients at H&R Block in which tax preparers gave simple, personalized information about the EITC schedule to half of their clients. We find no significant effects of information provision on earnings in the subsequent year in the full sample. Further exploration uncovers evidence of heterogeneous treatment effects on both self-employment income and wage earnings across the 1,461 tax professionals who assisted the clients involved in the experiment. We conclude that providing information about tax incentives through tax preparers does not systematically affect earnings on average. However, tax preparers may be able to influence their clients' earnings decisions by providing advice about how to respond to tax incentives.

JEL-codes: H31 J22 (search for similar items in EconPapers)
Date: 2009-04
New Economics Papers: this item is included in nep-exp, nep-lab and nep-pub
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Citations: View citations in EconPapers (69)

Published as Raj Chetty & Emmanuel Saez, 2013. "Teaching the Tax Code: Earnings Responses to an Experiment with EITC Recipients," American Economic Journal: Applied Economics, American Economic Association, vol. 5(1), pages 1-31, January.

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Journal Article: Teaching the Tax Code: Earnings Responses to an Experiment with EITC Recipients (2013)
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