Earned Income Tax Credit and crime

Lenhart, Otto (2020) Earned Income Tax Credit and crime. Contemporary Economic Policy. ISSN 1465-7287 (In Press)

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    Abstract

    This study examines the relationship between EITC laws and crime. Using data from 1999 to 2017, a period with 73 state EITC changes, I evaluate the effects of state-level EITCs on violent and property crime. Estimating difference-in-differences models, I find that higher EITCs are associated with significant reductions in violent crime, while not affecting property crimes. Introducing high state EITC is associated with a 10.0 percent reduction in violent crimes, which corresponds to 40 fewer crimes per 100,000 individuals. Event study estimates confirm the negative association between EITC generosity and violent crime.

    ORCID iDs

    Lenhart, Otto ORCID logoORCID: https://orcid.org/0000-0003-0949-4820;