Events Calendar

Tatiana Homonoff, New York University (Wagner)

Empirical Microeconomics

Friday, April 05, 2024, 01:30pm - 03:00pm

"Child Tax Benefits and Labor Supply: Evidence from California" (with Jacob Goldin, Neel Lal, Ithai Lurie, and Katherine Michelmore)

Abstract: The largest tax-based social welfare programs in the US limit their benefits to taxpayers with labor market income. Eliminating these work requirements would better target transfers to the neediest families but risks attenuating tax-based incentives to work. We study changes in labor force participation from the elimination of a work requirement in a tax credit for parents of young children, drawing on quasi-random variation in birth timing and administrative tax records. To do so, we develop and implement a novel approach for selecting an empirical specification to maximize the precision of our estimate. The unique design of the policy along with its subsequent reform allow us to isolate taxpayers' sensitivity to conditioning child tax benefits on work -- the parameter at the center of recent debates about the labor supply consequences of reforming federal tax policy for children. We estimate a precise null result, with a 95% confidence interval excluding labor supply reductions of three-tenths of a percentage point or greater. Our results suggest expanding tax benefits for low-income children need not meaningfully reduce labor force participation.

1:30pm-3:00pm | In Person, 3rd Floor Library, NJ Hall | Coordinators: Tom Prusa & Hector Blanco Fernandez

Location  In Person, 3rd Floor Library, NJ Hall
Contact  Tom Prusa & Hector Blanco Fernandez