Is there a positive health impact to families receiving the Earned Income Tax Credit, a central piece in the U.S. safety net for families with children? Researchers conclude that the sizeable increase in income for eligible families significantly improved birth outcomes for both whites and African Americans, with larger impacts for births to African American mothers.
Using tax-reform induced variation in the federal EITC and the presence and generosity of state EITC’s, researchers examine the impact of the credit on infant health outcomes. They find that increased EITC income reduces the incidence of low birth weight and increases mean birth weight. For single low education (<= 12 years) mothers, a policy-induced treatment on the treated increase of $1000 in EITC income is associated with 7% reduction in the low birth weight rate. These impacts are evident with difference-in-difference models and event study analyses.