TY - JOUR
T1 - Earned income tax credits and labor supply
T2 - New evidence from a british natural experiment
AU - Leigh, Andrew
PY - 2007/6
Y1 - 2007/6
N2 - With many countries considering the adoption of a system of earned income tax credits, it is useful to analyze how different types of credits affect labor supply and earnings. This paper focuses on a 1999 reform to the UK tax credit system, which increased the value of the credit and reduced the phaseout rate. Using panel data, with individual fixed effects, I compare eligibles and ineligibles within five groups: all individuals; those whose demographic characteristics predict that they will have low earnings; single women; women in couples; and men in couples. Over a 15-month period, boosting the credit appears to have raised the labor participation rates, hours, and earnings of those who were eligible to receive it.
AB - With many countries considering the adoption of a system of earned income tax credits, it is useful to analyze how different types of credits affect labor supply and earnings. This paper focuses on a 1999 reform to the UK tax credit system, which increased the value of the credit and reduced the phaseout rate. Using panel data, with individual fixed effects, I compare eligibles and ineligibles within five groups: all individuals; those whose demographic characteristics predict that they will have low earnings; single women; women in couples; and men in couples. Over a 15-month period, boosting the credit appears to have raised the labor participation rates, hours, and earnings of those who were eligible to receive it.
UR - http://www.scopus.com/inward/record.url?scp=34547778423&partnerID=8YFLogxK
U2 - 10.17310/ntj.2007.2.03
DO - 10.17310/ntj.2007.2.03
M3 - Article
SN - 0028-0283
VL - 60
SP - 205
EP - 224
JO - National Tax Journal
JF - National Tax Journal
IS - 2
ER -