Social, Political, and Economic Inequality

Does Higher Family Income Produce Better Child Health? Evidence from the 1993 Expansion of the Earned Income Tax Credit

Project Date:

June 2007

Award Amount:

$131,477

Summary

High income individuals are healthier and live longer than those at the bottom of the income distribution. Recent research reveals a similar connection between a family’s income and the health of its children. But does low household income cause poor child health outcomes, or are low income and poor child health both caused by some other factor? Is redistributing income to poor families an effective way to improve children’s health?

With an award from the Foundation, economist William Evans will take advantage of a unique opportunity to test for a relationship between income and children’s health. In 1993, the Earned Income Tax Credit (EITC) –which provides income support to working parents earning less than a certain threshold – was expanded to include more families. The size of the refund was also made more generous. Evans will use a quasi-experimental design to assess the impact of increased income on child as well as maternal health. He will use three health datasets to test whether the health of children in families eligible for EITC improved after the 1993 expansion relative to high-earning families that were not eligible for the refund. This approach will allow Evans to assess the effectiveness of income redistribution as a means of closing the gap in children’s health outcomes.

Reports and Publications