The earned income tax credit and infant health revisited. (23rd November 2019)

• Record Type: Journal Article
• Authors: Dench, Daniel; Joyce, Theodore
• Is Part Of: Health economics. Volume 29:Number 1(2020)
• Page Start: 72
• Page End: 84
• Publication Date: 2019-11-23
• Subjects: difference‐in‐differences -- earned income tax credit -- low birth weight; Medical economics -- Periodicals; Economics, Medical -- Periodicals; Health Care Costs -- Periodicals; Health Policy -- economics -- Periodicals; Health Services -- economics -- Periodicals; 362.1
• DOI: 10.1002/hec.3972
• Languages: English
• ISSNs: 1057-9230

Abstract

Abstract: Hoynes, Miller, and Simon (2015), henceforth HMS, report that the national expansion of the Earned Income Tax Credit (EITC) is associated with decreases in low birth weight. We question their findings. HMS's difference‐in‐differences estimates are unidentified in some comparisons, while failed placebo tests undermine others. Their effects lack a plausible mechanism as the association between the EITC and prenatal smoking also fails placebo tests. We contend that the waning of the crack epidemic is a possible confound, but we show that any number of policies directed at poor women also eliminate the effect of the EITC when aggregated to the national level. Identifying small, causal effects of a national policy at a single point in time is exceedingly challenging.