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The Effects of 1993 EITC Expansion on Marginal Tax Rates

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  • Adireksombat, Kampon

Abstract

The Earned Income Tax Credit (EITC) expansion affects labor supply and hence wages through changes in marginal tax rates (MTRs). This paper describes the effects of the 1993 EITC expansion on MTRs experienced by unmarried women. To demonstrate changes in MTRs, I use variation in the federal and state EITCs under the 1993 EITC expansion. Results suggest that the 1993 EITC expansion results in differential decreases in MTRs faced by unmarried women. Women with lower education experienced a larger decrease in their MTRs. Moreover, among women with the same education level, those with two or more children faced a larger decrease relative to those with one child and those with no children.

Suggested Citation

  • Adireksombat, Kampon, 2007. "The Effects of 1993 EITC Expansion on Marginal Tax Rates," MPRA Paper 18986, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:18986
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    References listed on IDEAS

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    More about this item

    Keywords

    Earned Income Tax Credit; Unmarried Women; and Marginal Tax Rates;
    All these keywords.

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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