Scholarly Publications

Making Work Pay Better Through an Expanded Earned Income Tax Credit


The Earned Income Tax Credit (EITC) is a refundable tax credit that promotes work. Research has shown that it also reduces poverty and improves health and education outcomes. The maximum credit for families with two or fewer children has remained flat in inflation-adjusted terms since 1996. Over the same period, earnings prospects have stagnated or diminished for many Americans, and prime-age employment rates have fallen. This paper proposes to build on the successes of the EITC with a ten percent acrossthe-board increase in the federal credit. This expansion would provide a meaningful offset to stagnating real wages, encourage more people to enter employment, lift approximately 600,000 individuals out of poverty, and improve health and education outcomes for millions of children.

Citation: Hoynes, Hilary, Jesse Rothstein, and Krista Ruffini. The 51%: Driving Growth through Women’s Economic Participation, Diane Whitmore Schanzenbach & Ryan Nunn, eds., The Hamilton Project/Brookings Institution. October, 2017.