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How do EITC recipients spend their refunds?

Author

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  • Andrew Goodman-Bacon
  • Leslie McGranahan

Abstract

The authors determine what items are purchased using the earned income tax credit (EITC)?one of the largest sources of public support for lower-income working families in the U.S. They find that recipient households? EITC payments are used primarily for vehicle purchases and transportation spending, both of which are crucial to job access and consistent with the EITC?s prowork goals.

Suggested Citation

  • Andrew Goodman-Bacon & Leslie McGranahan, 2008. "How do EITC recipients spend their refunds?," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 32(Q II), pages 17-32.
    • Handle: RePEc:fip:fedhep:y:2008:i:qii:p:17-32:n:v.32no.2
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    References listed on IDEAS

    as
    1. Bruce D. Meyer & Dan T. Rosenbaum, 2001. "Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(3), pages 1063-1114.
    2. Barrow, Lisa & McGranahan, Leslie, 2000. "The Effects of the Earned Income Credit on the Seasonality of Household Expenditures," National Tax Journal, National Tax Association, vol. 53(n. 4), pages 1211-44, December.
    3. Jeffrey Grogger, 2003. "The Effects of Time Limits, the EITC, and Other Policy Changes on Welfare Use, Work, and Income among Female-Headed Families," The Review of Economics and Statistics, MIT Press, vol. 85(2), pages 394-408, May.
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