Earned Income Tax Credit Affects Intergenerational Marriage and Childbirth Decisions, UM Study Finds


Children of earned income tax credit recipients have delayed marriage and first births, according to a new study co-authored by a University of Michigan professor, suggesting the cost-effectiveness of the federal program.

Catherine michelmore

Little is known about the long-term effects of marriage and the fertility of children of welfare recipients, which led Katherine Michelmore, associate professor of public policy, and Leonard Lopoo of Syracuse University to study the intergenerational effects of EITC on marriage and fertility. decision making.

Analyzing data from the Income Dynamics Panel Study, researchers found that children of EITC recipients delayed marriage and first births to early adulthood (ages 16 to 25). ). Specifically, a $ 1,000 increase in exposure to EITC during childhood resulted in a 2-3% drop in a woman’s chance of having her first child and of marrying early in her life. around twenty.

The study found similar reductions in fertility decisions among black and white women, but the marriage declines were concentrated among white women. Researchers have found no evidence that exposure to EITC affects men in the same way.

“These results are consistent with a perspective from human capital theory, which suggests that increasing the level of education increases the opportunity costs of childbearing, leading to lower fertility rates among young women exposed to childbearing. EITC, “the authors wrote in the study published in Demography.

The authors conclude that the study’s findings have implications for the well-being of young women who delay childbearing. They note that early pregnancy can lead to negative outcomes for both mother and child, including lower educational attainment, poor labor market outcomes, increased use of social protection programs, and poor health.

The results also have implications for federal and state spending on the EITC.

Every birth averted before the age of 25 reduces EITC claims, as people without children are not eligible for the credit before the age of 25, according to the study. The results further suggest that the program is cost-effective, “improving human capital and reducing the incidence of teenage pregnancies among those exposed to credit during childhood.”

The study builds on research into the family benefits of EITC by Michelmore and others at UM and Syracuse.

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