It’s hard to find a more bipartisan policy than the earned-income tax credit. Conservatives like it because it rewards work among the poor. Liberals like it because it gives poor families money. Both sides have long thought it played a role in increasing single mothers’ labor-force participation in the 1990s.
As I note in a piece for the Institute for Family Studies, though, a compelling new study pokes some serious holes in this narrative, arguing that the EITC actually does very little to encourage work — and that the 1996 welfare reform (along with similar, earlier reforms at the state level), not the 1993 expansion of the EITC, is what combined with the strong economy to push single mothers into the labor force. The paper does this by sorting out which types of single moms flooded into the work force, and by stressing what didn’t happen other times the EITC was expanded.
This doesn’t mean we should repeal the EITC, which if nothing else helped families get by when they were pushed off of welfare and into work starting in the 1990s. But it should make us think about different ways to structure the credit.
See my full piece and the original paper for a lot more.