EITC and Health Final Draft PERI Working Paper

The relationship between low socioeconomic status and higher levels of morbidity and mortality has been well-established in the literature. Researchers, however, rarely test the link between health improvements and social programs or economic policies designed to alleviate poverty. In this paper, we examine the health effects of the Earned Income Tax Credit (EITC), a broad-based income support program that operates at the federal, state, and local level. Specifically, we examine the health impact of expanding New York State and New York City’s EITC benefits on low-income neighborhoods between 1997 and 2010. We estimate that the 15-percentage-point increase in the state and local EITC rates reduced the low birth weight rate in New York City’s poor neighborhoods by 0.45 percentage points. This level of impact is substantial—from 1997 to 2010 low birth weight rates in these neighborhoods only fluctuated between 9.0 percent and 9.8 percent. Our estimates also suggest that EITC’s impact on low-income neighborhoods is stronger than that experienced by the average EITC-recipient household. Aside from this study, we are aware of no other neighborhood-level analysis of EITC’s impact on health. This evidence of health benefits associated with the EITC program should encourage policymakers to integrate the use of social and economic policies, such as the EITC, in their public health interventions. ACKNOWLEDGEMENTS: We are grateful to Leonard Rodberg who provided us with health outcome data for New York City via the Infoshare Online database, Kenneth Knapp who constructed our original data set, and Andrew Maroko for creating the figure in our paper. We also want to thank Michael Ash, Deborah Viola, and Clyde Schecter for their substantive feedback and the research assistance provided by Mia Ellis and Najah Levers. Finally, we would like to thank Len McNally and the New York City Community Trust for supporting this work.