Short-term effects of the earned income tax credit on children's physical and mental health

Abstract

Purpose: Child poverty is associated with worsened health, although there is limited research on whether U.S. poverty alleviation policies improve children's health. We examined the short-term effects of the earned income tax credit (EITC), among the largest U.S. poverty alleviation programs, on children's food insecurity, weight status, and mental health.

Methods: Using data from the National Health Interview Survey (NHIS, 1998-2016), we examined the effects of the EITC using a quasi-experimental difference-in-differences methodology. About 90% of EITC-eligible individuals receive tax refunds in February-April, while NHIS interviews occur throughout the year. We took advantage of this timing of refund receipt to compare EITC-eligible families interviewed in February-April with those interviewed in the other months, "differencing out" seasonal trends in outcomes among noneligible families. Analyses involved multivariable linear regressions.

Results: We found that food insecurity decreased in the months following EITC refund receipt, with no effects for weight status or mental health. Results were robust to alternative specifications.

Conclusion: While these findings suggest that food insecurity among vulnerable children was reduced immediately after EITC refund receipt, this also means that the EITC may contribute to cyclical food insecurity. Policies to enhance income stability may be one solution to address these findings.

Keywords: Child health; Earned income tax credit; Health disparities; Policy evaluation.