Date of Award
Doctor of Philosophy (PhD)
Kevin J. Mumford
Committee Member 1
Committee Member 2
Committee Member 3
The first chapter of this dissertation is titled ”Childhood Family Income and Adult Outcomes: Evidence from the EITC.” Many researchers have explored the impact of family income on children by utilizing structural changes in the Earned Income Tax Credit (EITC). However, most of this previous research focuses on childhood outcomes, such as effects on the child’s performance in school or effects on health and behavior. This paper is one of the few that estimates the effect of childhood family income on adult outcomes. In order to overcome the confounding relationship between childhood family income and future employment, this paper uses the structural changes made to the EITC, specifically the substantial changes made during the 1980’s and 1990’s, as an exogenous income shock. The main covariate of interest, maximum potential family EITC payments is constructed using the NBER TAXSIM calculator. This chapter provides evidence that casts doubt on the previous findings that the structural changes in the EITC, since it’s inception and through the early 2000’s, had a positive overall impact on long run educational and labor market outcomes. Replicating the methodology used in Bastian and Michelmore (forthcoming) on the combined NLSY and PSID sample produced overall effects that were much smaller in magnitude than their analysis. In addition, these effects seem to be driven by individuals in the PSID who are most likely to have unobserved characteristics that would bias the estimates positively. However, there are similar coefficients estimated for those in the 13 to 18 age range for those in the PSID and the NLSY. Thus, while the analysis on the overall PSID sample did produce some consistency with Bastian and Michelmore (forthcoming), the findings of positive effects for different subgroups and no effects for the subgroups in which they saw the largest responses call into question the robustness of their analysis. Evidence is also presented that indicates that the lack of significant effects in the NLSY is not due to differences in the years spanned by the two data sets.
The second chapter of this dissertation is titled ”Fertility Response to the Tax Treatment of Children.” This chapter uses variation in the child tax subsidy implicit in US personal income taxation over time and across states to estimate the effect of a decrease in the cost of raising a child on fertility. In a sample of 18,592 women age 20 to 43 from the Panel Study of Income Dynamics and the National Longitudinal Survey of Youth (NLSY79) surveyed between 1968 and 2013, we estimate that the tax subsidy for having a child does not seem to cause a significant fertility response, but some subgroups of the US population do have a positive and economically significant fertility response to the child tax subsidy. There are larger, statistically significant fertility effects for low-income women, single women, and women in the earlier half of our sample. The evidence suggests that not all child tax subsidy changes are equally salient for these subgroups as the fertility response is driven by increases to the Earned Income Tax Credit and not the value of the personal exemption or by increases to the Child Tax Credit.
Thomas, Paul W., "Essays in Labor Economics and Applied Microeconomics" (2018). Open Access Dissertations. 2084.