Earned Income Tax Credit makes for healthier newborns, study finds

February 22, 2013

The Earned Income Tax Credit is known to reduce poverty, but according to a new University of California, Davis, study it also is linked to reduced rates of low birth weight and increased average birth weight—key factors in measuring infant health.

who received the credit also showed lower smoking and drinking rates, possibly because the tax credit put more money in their pockets to pay for where they received prenatal care, the researchers said.

"The EITC reduces poverty, it increases the number of women in the workforce, and it may generate health benefits we have not quantified before," said Hilary Hoynes, professor of economics at UC Davis and the study's primary author. Hoynes, a National Bureau of Economics Research affiliate, studies poverty, inequality and the impacts of and transfer programs on low-income families.

"This adds to a small, but growing, literature on the potential health benefits of nonhealth programs in the safety net," she said.

The EITC is a federal tax credit for low- and moderate-income working people. It's designed to reduce poverty, encourage and reward work, as well as offset payroll and income taxes. It's also "refundable," which means that if the credit exceeds the amount of federal taxes owed by a low-wage worker, the IRS will send that extra amount as a refund check. About 26 million families receive these refunds annually.

Among the findings published in a working paper, researchers found that $1,000 of credit income resulted in reduced rates of low birth weight by 7 percent overall. African Americans showed an 8.2 percent reduction in rates of .

Hoynes and co-authors Douglas L. Miller, associate professor of economics, and David Simon, a in economics—all affiliated with the UC Davis Center for Poverty Research—used United States Vital Statistics data in the study. They looked at statistics covering the full census of births from 1984 to 1998. Expansions of the occurred during that period, in both 1986 and 1993.

Researchers focused on single women between 18 and 45 with less than a high school education—a highly affected group in which 42 percent who gave birth were eligible for the tax credit in 1998.

By 1996, the phased-in expansions to the tax credit meant that a working parent or family with two children would still be eligible with annual income levels of almost $30,000.

Hoynes said the tax credit reduces poverty by increasing income immediately with a cash credit, but it also creates incentives for people to stay in jobs to get the tax credit. Currently, 23 states and the District of Columbia have tax credits that supplement the federal credit at rates that range from 3.5 percent of the federal rate in Louisiana to 50 percent in Maryland. In the past year, nine states, including California, have introduced legislation or other proposals that either establish a state supplemental tax credit or alter programs already in existence.

Last April, Hoynes testified before the California Legislature about her research on the .

Explore further: Study finds many low-income families depend on tax credit program

More information: The paper is available at: bit.ly/XlVg73

Related Stories

Study finds many low-income families depend on tax credit program

October 21, 2011
The federal government's Earned Income Tax Credit (EITC) is designed to be a short-term safety net, but many participants return to the program time after time, says a new study co-authored by a Ball State University economist.

Recommended for you

Blowing smoke? E-cigarettes might help smokers quit

July 26, 2017
People who used e-cigarettes were more likely to kick the habit than those who didn't, a new study found.

Brain disease seen in most football players in large report

July 25, 2017
Research on 202 former football players found evidence of a brain disease linked to repeated head blows in nearly all of them, from athletes in the National Football League, college and even high school.

Safety of medical devices not often evaluated by sex, age, or race

July 25, 2017
Researchers at Yale and the University of California-San Francisco have found that few medical devices are analyzed to consider the influence of their users' sex, age, or race on safety and effectiveness.

Why you should consider more than looks when choosing a fitness tracker

July 25, 2017
A UNSW study of five popular physical activity monitors, including Fitbit and Jawbone models, has found their accuracy differs with the speed of activity, and where they are worn.

Dog walking could be key to ensuring activity in later life

July 24, 2017
A new study has shown that regularly walking a dog boosts levels of physical activity in older people, especially during the winter.

Study finds 275,000 calls to poison control centers for dietary supplement exposures from 2000 through 2012

July 24, 2017
U.S. Poison Control Centers receive a call every 24 minutes, on average, regarding dietary supplement exposures, according to a new study from the Center for Injury Research and Policy and the Central Ohio Poison Center, ...

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.