Reducing the Number of Children Entering Foster Care: Effects of State Earned Income Tax Credits

Foster care caseloads, an indicator of child maltreatment, are increasing. Children living in poverty are significantly more likely to be reported to the child welfare system and are overrepresented in foster care. Thus, it is critical to identify prevention strategies that can stem the flow of foster care entries, particularly among populations at higher risk. We used variations in the adoption and refund status of state-level Earned Income Tax Credit (EITC), a socioeconomic policy intended to reduce poverty, to examine their effect on foster care entry rates. Fixed-effects models, accounting for year- and state-fixed effects, demonstrated that a refundable EITC was associated with an 11% decrease in foster care entries compared to states without a state-level EITC after controlling for child poverty rate, racial/ethnic composition, education, and unemployment. Policies that strengthen economic supports for families may prevent child maltreatment and reduce foster care entries and associated costs.

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Association of State-Level Earned Income Tax Credits With Rates of Reported Child Maltreatment, 2004–2017

Child Maltreatment ◽

10.1177/1077559520987302 ◽

2021 ◽

pp. 107755952098730

Author(s):

Nicole L. Kovski ◽

Heather D. Hill ◽

Stephen J. Mooney ◽

Frederick P. Rivara ◽

Erin R. Morgan ◽

...

Keyword(s):

Child Maltreatment ◽

Low Income ◽

Emotional Abuse ◽

Income Tax ◽

Fixed Effects ◽

Statistical Significance ◽

State Level ◽

Economic Security ◽

Earned Income ◽

Percentage Point Increase

Poverty is an important predictor of child maltreatment. Social policies that strengthen the economic security of low-income families, such as the Earned Income Tax Credit (EITC), may reduce child maltreatment by impeding the pathways through which poverty leads to it. We used variations in the presence and generosity of supplementary EITCs offered at the state level and administrative child maltreatment data from the National Child Abuse and Neglect Data System (NCANDS) to examine the effect of EITC policies on state-level rates of child maltreatment from 2004 through 2017. Two-way fixed effects models indicated that a 10-percentage point increase in the generosity of refundable state EITC benefits was associated with 241 fewer reports of neglect per 100,000 children (95% Confidence Interval [CI] [−449, −33]). An increase in EITC generosity was associated with fewer reports of neglect both among children ages 0–5 (−324 per 100,000; 95% CI [−582, −65]) and children ages 6–17 (−201 per 100,000; 95% CI [−387, −15]). Findings also suggested associations between the EITC and reductions in other types of maltreatment (physical abuse, emotional abuse); however, those did not gain statistical significance. Economic support policies may reduce the risk of child maltreatment, especially neglect, and improve child wellbeing.

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The Oregon Earned Income Credit’s Impact on Child Poverty

10.31219/osf.io/h6w3g ◽

2019 ◽

Author(s):

David W. Rothwell ◽

Bruce Weber ◽

Leanne Giordono

Keyword(s):

Young Children ◽

Income Tax ◽

Child Poverty ◽

Poverty Rate ◽

Earned Income Tax Credit ◽

Tax Credit ◽

Earned Income ◽

Poverty Threshold ◽

Using Data ◽

The Impact

Oregon has a refundable earned income tax credit (OEIC) that is equal to 8 percent of the Federal Earned Income Tax Credit (EITC). In 2017, Oregon introduced a unique supplement to the OEIC that provided an additional 3% of the Federal EITC to families with children under age 3. To date, there has been no research examining the impact of the OEIC on child poverty. Using data from the Current Population Survey, we simulate the static effects of this unique state OEIC on overall poverty, child poverty, and early child poverty rates in Oregon. We find that the OEIC does not yield a change in the estimated headcount poverty rate for either children or young children. However, focusing exclusively on changes in poverty rates underestimates the impact of the OEIC. The overall estimated impact on the poverty gap and poverty severity is greater – about 2 to 4 percent. Children and young children in families closer to the poverty threshold experience reductions in the poverty gap and poverty severity by about 6 to 9 percent. We tested four policy simulations and found that a simulated OEIC set at 11% of EITC for children and 29% for young children would significantly decrease the child and young child poverty rates by 4 percent and 9 percent, respectively. To reduce more poverty via the OEIC would require substantially more resources which may not be feasible.

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The Effects of Changes in State Tax Enforcement on Corporate Income Tax Collections

Journal of the American Taxation Association ◽

10.2308/atax-51301 ◽

2015 ◽

Vol 38 (1) ◽

pp. 125-143 ◽

Cited By ~ 5

Author(s):

Sanjay Gupta ◽

Daniel P. Lynch

Keyword(s):

Income Tax ◽

Fixed Effects ◽

State Level ◽

Data Availability ◽

Corporate Income Tax ◽

Annual Reports ◽

Tax Policies ◽

Tax Enforcement ◽

Current Period ◽

State Tax

ABSTRACT Using a new hand-collected database on state department of revenue (DOR) expenditures, this study examines the association between changes in state corporate tax enforcement expenditures and state-level tax collections during the 2000–2008 time period. The results, after addressing endogeneity concerns using a changes specification and state fixed effects, suggest a $1 increase (decrease) in current period corporate enforcement is associated with an $8 to $11 increase (decrease) in state tax collections two years into the future. The association appears to be attenuated in states with restrictive tax policies (i.e., unitary/combined reporting and related-party add-back provisions) suggesting that enforcement and restrictive tax policies could serve as substitutes. JEL Classifications: H26; H71; H72. Data Availability: Enforcement data were hand collected from state revenue department annual reports and by contacting state corporate income tax personnel. All annual reports are publicly available.

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Effectiveness and limitations of the Earned Income Tax Credit for reducing child poverty in the United States

Children and Youth Services Review ◽

10.1016/j.childyouth.2009.04.008 ◽

2009 ◽

Vol 31 (8) ◽

pp. 919-926 ◽

Cited By ~ 7

Author(s):

Mary Keegan Eamon ◽

Chi-Fang Wu ◽

Saijun Zhang

Keyword(s):

United States ◽

Income Tax ◽

Child Poverty ◽

The United States ◽

Earned Income Tax Credit ◽

Tax Credit ◽

Earned Income

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Can ‘refundable’ state Earned Income Tax Credits explain child poverty in the American states?

Journal of Children and Poverty ◽

10.1080/10796120802685415 ◽

2009 ◽

Vol 15 (1) ◽

pp. 39-53 ◽

Cited By ~ 2

Author(s):

Younghee Lim

Keyword(s):

Income Tax ◽

Child Poverty ◽

Tax Credits ◽

Earned Income ◽

American States

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Can antipoverty programmes save lives? Quasi-experimental evidence from the Earned Income Tax Credit in the USA

BMJ Open ◽

10.1136/bmjopen-2020-037051 ◽

2020 ◽

Vol 10 (8) ◽

pp. e037051

Author(s):

Peter Muennig ◽

Daniel Vail ◽

Jahn K Hakes

Keyword(s):

Outcome Measures ◽

Income Tax ◽

State Level ◽

Earned Income Tax Credit ◽

Secondary Outcome ◽

Tax Credit ◽

Earned Income ◽

Quasi Experimental ◽

The Usa ◽

The Impact

ObjectiveTo estimate the impact of state-level supplements of the Earned Income Tax Credit (EITC) on mortality in the USA. The EITC supplements the wages of lower-income workers by providing larger returns when taxes are filed.SettingNationwide sample spanning 25 cohorts of people across every state in the USA.Participants793 000 respondents within the National Longitudinal Mortality Survey (NLMS) between 1986 and 2011, a representative sample of the USA.InterventionState-level supplementation to the EITC programme. Some, but not all, states added EITC supplementation to varying degrees beginning in 1986 (Wisconsin) and most recently in 2015 (California). Participants who were eligible in states with supplementary programmes were compared with those who were not eligible for supplementation. Comparisons were made both before and after implementation of the supplementary programme (a difference-in-difference, intent-to-treat analysis). This quasi-experimental approach further controls for age, gender, marital status, race or ethnicity, educational attainment, income and employment status.Primary and secondary outcome measuresThe primary outcome measure was survival at 10 years. Secondary outcome measures included survival at 5 years and survival to the end of the intervention period.ResultsWe find an association between state supplemental EITC and survival, with a HR of 0.973 (95% CI=0.951–0.996) for each US$100 of EITC increase (p<0.05).ConclusionState-level supplemental EITC may be an effective means of increasing survival in the USA.

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The Impact of Social Networks on EITC Claiming Behavior

Review of Economics and Statistics ◽

10.1162/rest_a_00995 ◽

2020 ◽

pp. 1-45 ◽

Cited By ~ 1

Author(s):

Riley Wilson

Keyword(s):

Social Networks ◽

Income Tax ◽

Social Connectedness ◽

State Level ◽

Behavior Changes ◽

County Level ◽

Earned Income ◽

Self Employment ◽

The Social ◽

The Impact

Using the Social Connectedness Index (Bailey et al., 2018b) to capture county-to-county Facebook linkages, I explore how county-level Earned Income Tax Credit (EITC) claiming behavior changes when the county's out-of-state social network is exposed to a newly implemented state EITC. Having more out-of-state friends face a state EITC shifts the composition of EITC claims toward more self-employment claiming. EITC claiming households' income distribution also shifts, moving away from the EITC region with smaller credits, towards income levels that generate the largest EITC. This mimics the direct impacts of state-level EITC policies, consistent with social networks increasing information or salience about EITC policy.

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The Impact of the Earned Income Tax Credit on Poverty: Analyzing the Dimensions by Race and Immigration

The Review of Black Political Economy ◽

10.1007/s12114-008-9030-2 ◽

2008 ◽

Vol 35 (4) ◽

pp. 117-127 ◽

Cited By ~ 3

Author(s):

Olugbenga Ajilore

Keyword(s):

African Americans ◽

Income Tax ◽

State Level ◽

Probit Model ◽

Earned Income Tax Credit ◽

Tax Credit ◽

Earned Income ◽

Poverty Transitions ◽

Using Data ◽

The Impact

This paper analyzes the effectiveness of the Earned Income Tax Credit (EITC) on poverty transitions, with an emphasis on native-born African–Americans and immigration. A probit model is estimated using data from the Current Population Survey (CPS), which evaluates the impact of EITC participation and immigration on transitions out of poverty. The EITC is found to be a useful tool in combating poverty and is effective for African–Americans, though only for women. More importantly, the results show that the implementation of state-level EITCs can mitigate the adverse effects of immigration for native-born African–Americans.

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