Earned income tax credit and crime

descriptionPublicationkeyboard_double_arrow_right Article 03 Feb 2021 English Publisher:WileyJournal:Contemporary Economic Policy, volume 39, pages 589-607 (issn: 1074-3529, eissn: 1465-7287,

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Authors: Otto Lenhart;

doi: 10.1111/coep.12522

Earned income tax credit and crime

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Abstract

AbstractThis study examines the relationship between earned income tax credit (EITC) laws and crime. Using data from 1999–2017, a period with 73 state EITC changes, I evaluate the effects of state‐level EITCs on violent and property crime. Estimating difference‐in‐differences models, I find that higher EITCs are associated with significant reductions in violent crime, while not affecting property crimes. Introducing high state EITC is associated with a 10.0% reduction in violent crimes, which corresponds to 40 fewer crimes per 100,000 individuals. Event study estimates confirm the negative association between EITC generosity and violent crime.

Related Organizations

University of Strathclyde
United Kingdom

Keywords

HC, 330, Economic History and Conditions

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