Goldman School of Public Policy - University of California, Berkeley

Hilary Hoynes

Professor of Public Policy and Economics, Haas Distinguished Chair in Economic Disparities

Areas of Expertise

  • Tax Policy
  • Labor and Employment
  • Poverty & Inequality
  • Children, Youth and Families
  • Government


Hilary Hoynes is a Professor of Public Policy and Economics and holds the Haas Distinguished Chair in Economic Disparities. She is the co-editor of the leading journal in economics, American Economic Review. Hoynes received her undergraduate degree from Colby College and her PhD from Stanford University.

Hoynes is an economist and specializes in the study of poverty, inequality, and the impacts of government tax and transfer programs on low income families. Current projects include evaluating the impact of the Great Recession across demographic groups, examining the impact of Head Start on cognitive and non-cognitive outcomes, examining the impact of the Earned Income Tax Credit on infant health, and estimating impacts of U.S. food and nutrition programs on labor supply, health and human capital accumulation.

In addition to her faculty appointment, Hoynes has research affiliations at the National Bureau of Economic Research, the UC Davis Center for Poverty Research and the Institute for Fiscal Studies. She sits on the National Advisory Committee of the Robert Wood Johnson Foundation Scholars in Health Policy Research Program and the Advisory Committee for the National Science Foundation, Directorate for the Social, Behavioral, and Economic Sciences. Prior to joining the Goldman School she was a Professor of Economics at UC Davis.

Curriculum Vitae

Download a PDF (201KB, updated 06-21-2014)

Working Papers

  • Do In-Work Tax Credits Serve as a Safety Net? [under review]

    Co-authors: Marianne Bitler, Elira Kuka

    GSPP Working Paper (June 2014)

    The cash and near cash safety net in the U.S. has undergone a dramatic transformation in the past fifteen years. Federal welfare reform has led to the “elimination of welfare as we know it” and several tax reforms have substantially increased the role of “in-work”' assistance. In 2010, we spent more than 5 dollars on the Earned Income Tax Credit (EITC) for every dollar spent on cash benefits through Temporary Assistance for Needy Families (TANF), whereas in 1994 on the eve of federal welfare reform these programs were about equal in size. In this paper, we evaluate and test whether the EITC satisfies a defining feature of a safety net program—that it responds to economic need. In particular, we explore how EITC participation and expenditures change with the business cycle. The fact that the EITC requires earned income leads to a theoretical ambiguity in the cyclical responsiveness of the credit. We use administrative IRS data to examine the relationship between business cycles and the EITC program. Our empirical strategy relies on exploiting differences in the timing and severity of economic cycles across states. The results show that higher unemployment rates lead to higher EITC recipients and total dollar amounts of credits for married couples. On the other hand, the effect of business cycles on the EITC is insignificant for single individuals, whether measured by recipients or expenditures. In sum, our results show that the EITC serves to mitigate against income shocks for married couples with children but not for the majority of recipients—single parents with children. The patterns we identify are consistent with the predictions of static labor supply theory, which we confirm with an analysis of earnings, and with expectations about how economic shocks are likely to affect one versus two-earner households.

    Current Draft [under review] (910KB)

    NBER Working Paper 19785 (597KB)

  • Experimental Evidence on Distributional Impacts of Head Start

    Co-authors: Marianne P. Bitler, Thurston Domina

    GSPP Working Paper (June 2014)

    The federal Head Start program funds public preschools for eligible low-income families. In so doing it aims to raise educational attainment levels and narrow educational inequalities. Existing research demonstrates that Head Start has short run positive impacts on cognitive outcomes that fade out for many groups by elementary school (e.g., Currie & Thomas (1995)). However, there appear to be some lasting positive impacts of Head Start on long-run educational and other outcomes (Deming(2009); Garces, Currie & Thomas (2002); Ludwig & Miller (2007)). In this study, we provide the rst comprehensive analysis of the distributional e ects of Head Start. We do so using the rst national randomized experiment testing the e ects of the Head Start program (the Head Start Impact Study). We examine e ects on cognitive and non-cognitive outcomes and explore the heterogeneous e ects of the program through 1st grade by estimating quantile treatment e ects under endogeneity (IV-QTE) as well as various types of subgroup mean treatment e ects and two-stage least squares treatment e ects. We nd that (the experimentally manipulated) Head Start attendance leads to large and statistically signi cant gains in cognitive achievement during the preschool period and that gains are largest at the bottom of the distribution for several measures. However, once the children enter elementary school, the cognitive gains fade out. Importantly, we nd that one important group|Spanish speakers| has cognitive gains that persist through 1st grade. We nd little e ect of Head Start on non-cognitive (social-emotional) outcomes. Our results provide strong evidence in favor of a compensatory model of educational process in this context.

    Current Draft (426KB)

  • Can Constant Treatment Effects Within Subgroup Explain Heterogeneity in Welfare Reform Effects? [revision under review, RESTAT]

    Co-authors: Marianne Bitler, Jonah Gelbach

    GSPP Working Paper (April 2014)

    In this paper, we assess whether welfare reform a ects earnings only through mean impacts that are constant within but vary across subgroups. This is important because researchers interested in treatment e ect heterogeneity typically restrict their attention to estimating mean impacts that are only allowed to vary across subgroups. Using a novel approach to simulating treatment group earnings under the constant mean-impacts within subgroup model, we fi nd that this model does a poor job of capturing the treatment eff ect heterogeneity for Connecticut's Jobs First welfare reform experiment using quantile treatment eff ects. Notably, ignoring within-group heterogeneity would lead one to miss evidence that the Jobs First experiment's e ffects are consistent with central predictions of basic labor supply theory.

    Current Draft [revision under review RESTAT] (884KB)

  • Long Run Impacts of Childhood Access to the Safety Net [revise and resubmit American Economic Review]

    Co-authors: Diane Whitmore Schanzenbach, Douglas Almond

    GSPP Working Paper (April 2014)

    A growing economics literature establishes a causal link between in utero shocks and health and human capital in adulthood. Most studies rely on extreme negative shocks such as famine and pandemics. We are the first to examine the impact of a positive and policy-driven change in economic resources available in utero and during childhood. In particular, we focus on the introduction of a key element of the U.S. safety net, the Food Stamp Program, which was rolled out across counties in the U.S. between 1961 and 1975. We use the Panel Study of Income Dynamics to assemble unique data linking family background and county of residence in early childhood to adult health and economic outcomes. The identification comes from variation across counties and over birth cohorts in availability of the food stamp program. Our findings indicate that the food stamp program has effects decades after initial exposure. Specifically, access to food stamps in childhood leads to a significant reduction in the incidence of “metabolic syndrome” (obesity, high blood pressure, and diabetes) and, for women, an increase in economic self-sufficiency. Overall, our results suggest substantial internal and external benefits of the safety net that have not previously been quantified.

    Current Draft [revise and resubmit AER] (388KB)

    Earlier Draft (NBER Working Paper No. 18535) (4KB)

  • SNAP and Food Consumption

    Co-authors: Leslie McGranahan , Diane Schanzenbach

    GSPP Working Paper (January 2014)

    In this paper we describe the relationship between SNAP and food consumption. We first present the neoclassical framework for analyzing in-kind transfers, which unambiguously predicts that SNAP will increase food consumption, and then describe the SNAP benefit formula. We then present new evidence from the Consumer Expenditure Survey on food spending patterns among households overall, SNAP recipients, and other subgroups of interest. We find that a substantial fraction of SNAP-eligible households spend an amount that is above the program’s needs standard. We also show that the relationship between family size and food spending is steeper than the slope of the SNAP needs parameter, and that large families are more likely to spend less on food than the needs standard amount. By program design, actual benefit levels are smaller than the needs standards. We find that most families spend more on food than their predicted benefit allotment, and are therefore infra-marginal and are predicted to treat their benefits like cash according to the neoclassical model.

    Current Draft [under review] (1MB)

  • The More Things Change, the More They Stay the Same: The Safety Net, Living Arrangements, and Poverty in the Great Recession [revise and resubmit JOLE]

    Co-author: Marianne Bitler

    GSPP Working Paper (September 2013)

    Much attention has been given to the large increase in safety net spending, particularly in Unemployment Insurance and Food Stamps, during the Great Recession. In this paper we examine the relationship between poverty, the social and private safety net, and business cycles historically and test whether there has been a significant change in this relationship during the Great Recession. We explore the mediating role played by six core safety net programs-including Food Stamps, cash welfare (AFDC/TANF), the Earned Income Tax Credit, Unemployment Insurance, and disability benefits (Supplemental Security Income and Social Security Disability Income)-in buffering families from negative economic shocks. This analysis yields several important findings. First, the relationship between unemployment and official cash poverty remained remarkably consistent with historical patterns during the Great Recession. However, our more expansive alternative poverty measure shows that, if anything, the cyclicality of poverty has increased in the current period. Second, the safety net programs receiving the most attention through the Great Recession (Food Stamps and UI) exhibit adjustments very consistent with their behavior during previous historical cycles. The most dramatic change in the safety net is the post-welfare reform decline of cash assistance in providing protection for the most disadvantaged. Third, changes in living arrangements are modest and for the most part in line with prior cycles. Thus on balance we find, as our title suggests, that despite the attention to the apparent differences in the responses of the private and social safety nets in the Great Recession, the relationship between cycles and economic well-being are as we would have predicted from the historical patterns.

    NBER Working paper 19449 (1MB)

Selected Publications

  • Income, the Earned Income Tax Credit, and Infant Health

    Hoynes, Hilary, Doug Miller, David Simon. Forthcoming, American Economic Journal: Economic Policy.

    Current Draft (October 2013) (634KB)

  • Distributional Effects of a School Voucher Program: Evidence from New York City

    Bitler, Marianne P., Thurston Domina, Emily K. Penner, and Hilary W. Hoynes. Forthcoming Journal of Research on Educational Effectiveness. 

    NBER Working Paper No. 19271 (338KB)

  • Immigrants, Welfare and the U.S. Safety Net

    In Card, David and Steven Raphael (eds.), Immigration, Poverty, and Socioeconomic Inequality, in press, Russell Sage Foundation, New York, NY (with Marianne Bitler).

    Beginning with the 1996 federal welfare reform law many of the central safety net programs in the U.S. eliminated eligibility for legal immigrants, who had been previously eligible on the same terms as citizens. These dramatic cutbacks affected eligibility not only for cash welfare assistance for families with children, but also for food stamps, Medicaid, SCHIP, and SSI. In this paper, we comprehensively examine the status of the U.S. safety net for immigrants and their family members. We document the policy changes that affected immigrant eligibility for these programs and use the CPS for 1995-2010 to analyze trends in program participation, income, and poverty among immigrants (and natives). We pay particular attention to the recent period and examine how immigrants and their children are faring in the “Great Recession” with an eye toward revealing how these policy changes have affected the success of the safety net in protecting this population.

    Final (492KB)

  • Who Suffers During Recessions?

    Journal of Economic Perspectives, Volume 26, Number 3, Summer 2012, pages 27–48 (with Doug Miller and Jessamyn Schaller).

    The Great Recession generated large reductions in employment, earnings, he Great Recession generated large reductions in employment, earnings, and income for workers and families in the United States. The seasonally and income for workers and families in the United States. The seasonally adjusted unemployment rate increased from 5 percent in December 2007 to adjusted unemployment rate increased from 5 percent in December 2007 to 9.5 percent in June 2009, the start and end of the recession according to the National 9.5 percent in June 2009, the start and end of the recession according to the National Bureau of Economic Research. From 2007 to 2010, median real family income fell by 6 percent and the poverty rate 2007 to 2010, median real family income fell by 6 percent and the poverty rate increased from 12.5 percent to 15.1 percent (DeNavas-Walt, Proctor, and Smith increased from 12.5 percent to 15.1 percent (DeNavas-Walt, Proctor, and Smith 2011). The recovery since June 2009 has been slow relative to historical averages. 2011). The recovery since June 2009 has been slow relative to historical averages. In the more than two and a half years since the offi cial start of the recovery, the In the more than two and a half years since the offi cial start of the recovery, the unemployment rate has fallen by just over a percentage point, reaching 8.3 percent unemployment rate has fallen by just over a percentage point, reaching 8.3 percent in February 2012. The effects of the Great Recession, however, are not experienced in February 2012. The effects of the Great Recession, however, are not experienced equally by all workers. National statistics can obscure dramatic differences in the equally by all workers. National statistics can obscure dramatic differences in the severity of the cyclical impacts for different groups. For example, men experienced severity of the cyclical impacts for different groups. For example, men experienced signifi cantly larger job loss in the Great Recession compared to women, but during signifi cantly larger job loss in the Great Recession compared to women, but during the recovery, male employment is picking up more rapidly (Kochhar 2011). the recovery, male employment is picking up more rapidly (Kochhar 2011).

    Published Article (711KB)

    Appendix to Published Article (422KB)

    NBER Digest Summary (4KB)

    UC Davis Center for Poverty Research Policy Brief (4KB)

    Earlier Draft (NBER Working Paper No. 17951) (4KB)

  • Work Incentives and the Food Stamp Program

    Hoynes, Hilary Williamson., and Diane Schanzenbach. "Work Incentives and the Food Stamp Program." Journal of Public Economics 96(1-2): 151-62, 2012.

    Labor supply theory makes strong predictions about how the introduction or expansion of a social welfare program impacts work effort. Although there is a large literature on the work incentive effects of AFDC and the EITC, relatively little is known about the work incentive effects of the Food Stamp Program and none of the existing literature is based on quasi-experimental methods. We use the cross-county introduction of the program in the 1960s and 1970s to estimate the impact of the program on the extensive and intensive margins of labor supply, earnings, and family cash income. Consistent with theory, we find reductions in employment and hours worked when food stamps are introduced. The reductions are concentrated among families headed by single woman.

    Published Article (4KB)

    Earlier Draft (NBER Working Paper No. 16198) (4KB)

  • The Insurance Value of State Tax-and-Transfer Programs

    Hoynes, Hilary Williamson., and Erzo F. P. Luttmer. "The Insurance Value of State Tax-and-transfer Programs." Journal of Public Economics 95(11-12): 1466-1484, 2011.

    This paper estimates the total value that individuals derive from their state's tax-and-transfer program, and shows how this value varies by income. The paper decomposes this total value into two components: redistributive value, which is due to predictable changes in income (and family circumstances), and insurance value, which occurs when taxes and transfers compensate for unexpected income shocks. Our approach is a forward-looking one, where we examine income and transfers net of taxes over a 10-year period. We model state taxes (personal income taxes, the EITC, and sales taxes) and state means-tested transfers (AFDC/TANF and Medicaid/SCHIP). The calculations are made using the Panel Study of Income Dynamics and allow for analysis of the role of changes in tax-and-transfer programs, demographics, and income in the value of state net benefits over a period of more than 30 years. Wefind that the redistributive value of state tax-and-transfer programs sharply declines with income, but that the insurance value is increasing in income. The resulting
    total value still declines with income, but not nearly as sharply as the redistributive value. Hence, the insurance value mitigates the incentives for mobility that would “undo” state redistributive spending.

    Published Article (4KB)

    Earlier Draft (NBER Working Paper No. 16280) (4KB)

  • Inside the War on Poverty: The Impact of the Food Stamp Program on Birth Outcomes

    Almond, Douglas, Hilary Williamson. Hoynes, and Diane Schanzenbach. "Inside the War on Poverty: The Impact of Food Stamps on Birth Outcomes." Review of Economics and Statistics, May 2011, Vol. 93, No. 2: 387-403.

    This paper evaluates the health impacts of a signature initiative of the War on Poverty: the introduction of the modern Food Stamp Program (FSP). Using variation in the month FSP began operating in each U.S. county, we find that pregnancies exposed to FSP three months prior to birth yielded deliveries with increased birth weight, with the largest gains at the lowest birth weights. We also find small but statistically insignificant improvements in neonatal mortality. We conclude that the sizable increase in income from FSP improved birth outcomes for both whites and African Americans, with larger impacts for African American mothers.

    Published Article (4KB)

    Erratum (10/21/12) (110KB)

    Electronic Appendix (270KB)

  • Can Targeted Transfers Improve Birth Outcomes? Evidence from the Introduction of the WIC Program

    Hoynes, Hilary, and Marianne Page, Ann Huff Stevens. "Can targeted transfers improve birth outcomes? Evidence from the introduction of the WIC program." Journal of Public Economics 95, 813–827.

    The goal of federal food and nutrition programs in the United States is to improve the nutritional well-being and health of low income families. A large body of literature evaluates the extent to which the Supplemental Program for Women Infants and Children (WIC) has accomplished this goal, but most studies have been based on research designs that compare program participants to non-participants. If selection into these programs is non-random then such comparisons will lead to biased estimates of the program's true effects. In this study we use the rollout of the WIC program across counties to estimate the impact of the program on infant health. We find that the implementation of WIC led to an increase in average birth weight and a decrease in the fraction of births that are classified as low birth weight. We find no evidence that these estimates are driven by changes in fertility or selection into live births. Our preferred estimates suggest thatWIC initiation raised average birth weight by 2 g, or by 7 g among infants born to mothers with low education levels. These translate into estimated birth weight increases among participating mothers of approximately 18 to 29 g. Estimated treatments on the treated impacts among infants born to participating mothers with low education are of similar magnitude.

    Published Article (4KB)

    Summary of this paper in NBER Digest (4KB)

    Earlier Draft (NBER Working Paper No. 15589) (4KB)

  • The State of the Safety Net in the Post-Welfare Reform Era

    Hoynes, Hilary. The State of the Safety Net in the Post-Welfare Reform Era (with Marianne Bitler). Brookings Papers on Economic Activity Fall 2010, pp. 71-127.

    The 1996 welfare reform led to sweeping changes to the central cash safety net program for families with children. Along with other changes, the reform imposed lifetime time limits for receipt of cash welfare, effectively ending its entitlement nature for these families. Despite dire predictions, previous research has shown that program caseloads declined and employment increased, with no detectible increase in poverty or worsening of child well-being. We reevaluate these results in light of the severe 2007–09 recession. In particular, we examine how welfare reform has altered the cyclicality of the response of caseloads and family well-being. We find that use of food stamps and noncash safety net program participation have become significantly more responsive to the economic cycle after welfare reform, rising more when unemployment increases. By contrast, we find no evidence that cash welfare for families with children is more responsive, and some evidence that it might be less so. We find some evidence that poverty increases more with increases in the unemployment rate after reform, and none that it increases less. We find no significant effects of reform on the cyclical responsiveness of food consumption, food insecurity, health insurance, household crowding, or health.

    Published Article (4KB)

    Earlier Draft (NBER Working Paper No. 16504) (4KB)

  • Redistribution and Tax Expenditures: The Earned Income Tax Credit

    Hoynes, Hilary. Redistribution and Tax Expenditures: The Earned Income Tax Credit (with Nada Eissa). National Tax Journal, June 2011, 64 (2, Part 2), 689-730.

    This paper examines the distributional and behavioral effects of the Earned Income Tax Credit (EITC). We chart the growth of the program over time, and argue that several expansions show that real responses to taxes are important. We use tax data to show the distribution of benefi ts by income and family size, and examine the impacts of hypothetical reforms to the credit. Finally, we calculate the effi ciency effects of marginal changes to EITC parameters

    NTJ Published Version (620KB)

  • Taxing the Family

    Hoynes, Hilary. Taxing the Family Commentary in "Dimensions of Tax Design: The Mirrlees Review," Stuart Adam, Timothy Besley, Richard Blundell, Stephen Bond, Robert Chote, Malcolm Gammie, Paul Johnson, Gareth Myles, and James Poterba, editors. Oxford University Press, 2010.

  • Consumption Responses to In-Kind Transfers: Evidence from the Introduction of the Food Stamp Program

    Hoynes, Hilary. Consumption Responses to In-Kind Transfers: Evidence from the Introduction of the Food Stamp Program (with Diane Whitmore Schanzenbach), American Economic Journal: Applied Economics Vol. 1, No. 4, October 2009, pp. 109-139.

    Economists have strong theoretical predictions about how in-kind transfers, such as providing vouchers for food, impact consumption. Despite the prominence of the theory, there is little empirical work on responses to in-kind transfers, and most existing work fails to support the canonical theoretical model. We employ difference-indifference methods to estimate the impact of program introduction on food spending. Consistent with predictions, we find that food stamps reduce out-of-pocket food spending and increase overall food expenditures. We also find that households are inframarginal and respond similarly to one dollar in cash income and one dollar in food stamps.

  • The Earned Income Tax Credit, Welfare Reform, and the Employment of Low Skill Single Mothers

    Hoynes, Hilary. The Earned Income Tax Credit, Welfare Reform, and the Employment of Low Skill Single Mothers, in Strategies for Improving Economic Mobility of Workers: Bridging Research and Practice, Maude Toussaint-Comeau and Bruce D. Meyer, eds. Upjohn Press. 2009.

    Published Version (644KB)

  • Distributional Impacts of the Self Sufficiency Project

    Hoynes, Hilary. Distributional Impacts of the Self Sufficiency Project, Journal of Public Economics, Volume 92, Issues 3-4, pages 748-765, April 2008 (with Marianne Bitler and Jonah Gelbach).

    A large literature has been concerned with the impacts of recent welfare reforms on income, earnings, transfers, and labor-force attachment. While one strand of this literature relies on observational studies conducted with large survey-sample data sets, a second makes use of data generated by experimental evaluations of changes to means-tested programs. Much of the overall literature has focused on mean impacts. In this paper, we use random-assignment experimental data from Canada's Self-Sufficiency Project (SSP) to look at impacts of this unique reform on the distributions of income, earnings, and transfers. SSP offered members of the treatment group a generous subsidy for working full time. Quantile treatment effect (QTE) estimates show there was considerable heterogeneity in the impacts of SSP on the distributions of earnings, transfers, and total income; this heterogeneity would be missed by looking only at average treatment effects. Moreover, these heterogeneous impacts are consistent with the predictions of labor supply theory. During the period when the subsidy is available, the SSP impact on the earnings distribution is zero for the bottom half of the distribution. The quantiles of the SSP earnings distribution are higher for much of the upper third of the distribution except at the very top, where the quantiles of the earnings distribution are the same under either program or possibly lower under SSP. Further, during the period when SSP receipt was possible, the impacts on the quantiles of the distributions of transfer payments (Income Assistance plus the subsidy) and total income (earnings plus transfers) are also different at different points of the distribution. In particular, positive impacts on the quantiles of the transfer distribution are concentrated at the lower end of the transfer distribution, while positive impacts on the quantiles of the income distribution are concentrated in the upper end of the income distribution. Impacts of SSP on these distributions were essentially zero after the subsidy was no longer available.

    Published Article (4KB)

    Earlier Draft (NBER Working Paper No. 11626) (4KB)

  • Welfare Reform and Indirect Impacts on Health

    Hoynes, HilaryWelfare Reform and Indirect Impacts on Health, in Making Americans Healthier: The Effects of Social and Economic Policy on Health, R. Schoeni, J. House, G. Kaplan, and H. Pollack, editors, Russell Sage Press, 2008. (with Marianne Bitler)

    Published Version (2MB)

    Earlier draft (NBER Working Paper 12642) (4KB)

  • The Impact of Welfare Reform on Children’s Living Arrangements

    Hoynes, Hilary. “The Impact of Welfare Reform on Children's Living Arrangements,” Journal of Human Resources Volume 41, Number 1, pp. 1-27, Winter 2006 (with Marianne Bitler and Jonah Gelbach).

    Little is known about welfare reform’s effects on family structure and children’s living arrangements, an important focus for reformers. Using March CPS data, we find that state welfare waivers are associated with children being less likely to live with unmarried parents, more likely to live with married parents, and more likely to live with neither parent. Children living with neither parent are living with grandparents or other relatives, or rarely, in foster care. The estimates vary somewhat by children’s race and ethnicity. Due to the limited variation in TANF’s implementation timing across states, we focus on the waiver results.

    Published Article (4KB)

    Summary of this paper in Focus (4KB)

    Summary of this paper in Poverty Research News (4KB)

  • What Mean Impacts Miss: Distributional Effects of Welfare Reform Experiments

    Hoynes, Hilary. “What Mean Impacts Miss: Distributional Effects of Welfare Reform Experiments,” American Economic Review Volume 96, Number 4, pp. 988-1012, September 2006 (with Marianne Bitler and Jonah Gelbach).

    Labor supply theory predicts systematic heterogeneity in the impact of recent welfare reforms on earnings, transfers, and income. Yet most welfare reform research focuses on mean impacts. We investigate the importance of heterogeneity using random-assignment data from Connecticut's Jobs First waiver, which features key elements of post-1996 welfare programs. Estimated quantile treatment effects exhibit the substantial heterogeneity predicted by labor supply theory. Thus mean impacts miss a great deal. Looking separately at samples of dropouts and other women does not improve the performance of mean impacts. We conclude that welfare reform's e ects are likely both more varied and more extensive than has been recognized.

    Published Article (4KB)

    Earlier Version (NBER Working Paper 10121) (4KB)

  • Poverty in America: Trends and Explanations

    Hoynes, Hilary. Poverty in America: Trends and Explanations, Journal of Economic Perspectives Volume 20, Number 1, pp. 47-68 2006 (with Marianne Page and Ann Stevens).

    Published Version (244KB)

  • Behavioral Responses to Taxes: Lessons from the EITC and Labor Supply

    Hoynes ,Hilary. “Behavioral Responses to Taxes: Lessons from the EITC and Labor Supply,” Tax Policy and the Economy Volume 20, pp. 74-110. MIT Press, 2006 (with Nada Eissa).

    Twenty-two million families currently receive a total of $34 billion in benefits from the earned income tax credit (EITC). In fact, the EITC is the largest cash-transfer program for lower-income families at the federal level. An unusual feature of the credit is its explicit goal to use the tax system to encourage and support those who choose to work. A large body of work has evaluated the labor supply effects of the EITC and has generated several important findings regarding the behavioral response to taxes. Perhaps the main lesson learned from the evidence is the confirmation that real responses to taxes are important; labor sup- ply does respond to the EITC. The second major lesson is related to the nature of the labor supply response. A consistent finding is that labor supply responses are concentrated along the extensive (entry) margin, rather than the intensive (hours worked) margin. This distinction has important implications for the design of tax-transfer programs and for the welfare evaluation of tax reforms.

    Published Article (4KB)

    Earlier Version (NBER Working Paper No. 11729) (4KB)

  • The Hours of Work Response of Married Couples: Taxes and the Earned Income Tax Credit

    Hoynes, Hilary. “The Hours of Work Response of Married Couples: Taxes and the Earned Income Tax Credit,” in Tax Policy and Labor Market Performance, Jonas Agell and Peter Birch Sorensen, eds. MIT Press, 2006 (with Nada Eissa).

    The EITC is currently the largest, federal cash-transfer program for low-income families, with expenditures of almost $34 billion dollars in 2002. Advocates of the credit argue that this redistribution occurs with much less distortion to labor supply than that caused by other elements of the welfare system. Empirical evidence has established that the credit “encourages work effort” among eligible female household heads. Less recognized is the fact that these positive work incentives are unlikely to hold among married couples. Theory suggests that while primary earners (typically men) would increase labor force participation, secondary earners would reduce their labor supply in response to an EITC. We study the hours worked response of married couples to several EITC expansions between 1984 and 1996. While our primary interest is the response to changes in the budget set induced by the EITC, our identification strategy takes account of budget set changes caused by federal tax policy, as well as cross-sectional differences in non-labor income and family size. We estimate reduced-form hours of work equations using instrumental variables to account for the endogeneity of net of tax wages and virtual income. Our instruments are based on tax reforms and trace out the budget set. The results show that EITC expansions between 1984 and 1996 led to modest reductions in hours worked by married men and married women. Overall, married women in the labor force are estimated to decrease hours worked by between 1 and 4 percent. Women in the phase-out range of the credit experience the greatest reductions, between 3 and 17 percent. Overall, the evidence suggests that family labor supply and pretax earnings fell.

    Published Version (306KB)

  • Welfare Reform and Health

    Hoynes, Hilary. “Welfare Reform and Health,” Journal of Human Resources Volume 40, Number 2, pp. 306-334, Spring 2005 (with Marianne Bitler and Jonah Gelbach).

    We investigate the relationship between welfare reform and health insurance, health care utilization, and self-reported measures of health status for women aged 20-45, using nationally representative data from the Behavioral Risk Factor Surveillance System. We present estimates from both difference-in-difference models (applied to single women and single women with children) and difference-in-difference-in-difference models (using married women and single women without children as comparison groups). We find that welfare reform is associated with reductions in health insurance coverage and specific measures of health care utilization, as well as an increase in the likelihood of needing care but finding it unaffordable. We find no statistically significant effects of reform on health status. Overall, effects are somewhat larger for Hispanics compared to blacks and low educated women.

    Published Article (4KB)

  • Taxes and the Labor Market Participation of Married Couples: The Earned Income Tax Credit

    Hoynes, Hilary. “Taxes and the Labor Market Participation of Married Couples: The Earned Income Tax Credit,” Journal of Public Economics, Volume 88, Number 9-10, pp. 1931-1958, August 2004. (with Nada Eissa).

    A distinguishing feature of recent changes to the US system of public assistance is its increasing focus onworking families and reliance on the tax system to transfer dollars to needy families. After a decade in near total obscurity, the earned income tax credit (EITC) was expanded to become the largest cash-transfer program for lower-income families with children. Advocates of the EITC argue that, unlike traditional welfare, the credit helps ‘‘promote both the values of family and work’’. Indeed, empirical evidence consistent with economic theory suggests that the EITC promotes employment among eligible unmarried women with children. To target benefits to lower-income families, however, the EITC is based on family income, leading to traditional welfare-type disincentives for most eligible secondary earners. In fact, the EITC is likely to reduce overall family labor supply among married couples. This paper examines the labor force participation response of married couples to EITC expansions between 1984 and 1996. The effect of the credit is estimated using both quasiexperimental and traditional reduced-form labor supply models. Results from both models show the same qualitative conclusion, that the EITC expansions reduced total family labor supply of married couples. In all cases, we find a decline in labor force participation by married women that more than offsets any rise in participation by their spouses. While the labor force participation rate of married men increased by about 0.2 percentage points, that of married women decreased by just over a full percentage point. These aggregate effects mask substantial heterogeneity in the population. Women facing the strongest disincentives were more than 2 percentage points less likely to work after the expansions. These findings imply that the EITC is effectively subsidizing married mothers to stay home, and therefore, have implications for the design of the program.

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    Summary of this paper in NBER Digest (4KB)

    Summary of this paper in Poverty Research News (4KB)

  • The Impact of Welfare Reform on Marriage and Divorce

    Hoynes, Hilary. “The Impact of Welfare Reform on Marriage and Divorce,” Demography, Volume 41, Number 2, pp. 213-236, May 2004 (with Marianne Bitler, Jonah Gelbach, and Madeline Zavodny).

    The goal of the 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) was to end the dependency of needy parents on government benefits, in part by promoting marriage. The pre-reform welfare system was widely believed to discourage marriage because it primarily provided benefits to single mothers. However, welfare reform may have actually decreased the incentives to be married by giving women greater financial independence via the program's new emphasis on work. This paper uses Vital Statistics data on marriages and divorces during 1989-2000 to examine the role of welfare reform (state waivers and TANF implementation) and other state-level variables on flows into and out of marriage. The results indicate that welfare reform has led to fewer new divorces and fewer new marriages, although the latter result is sensitive to specification and data choice.

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  • Tax Rates and Work Incentives in the Social Security Disability Income Program: Current Law and Proposed Reforms

    Tax Rates and Work Incentives in the Social Security Disability Income Program: Current Law and Proposed Reforms, National Tax Journal, Volume 52, No. 4, 623-654, December 1999 (with Robert Moffitt).

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  • Has In-Work Benefit Reform Helped the Labour Market?

    Hoynes, Hilary. “Has In-Work Benefit Reform Helped the Labour Market?" in Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980-2000, edited by David Card, Richard Blundell and Richard Freeman. University of Chicago Press: Chicago, 2004 (with Richard Blundell).

    The aim of this paper is to examine the labour market impact of in-work benefit reform in the UK. Evidence is drawn from the impact of earlier reforms in the UK and similar reforms in the US. We focus on the impact on labour supply – employment and hours of work. In the US a large proportion of the dramatic increase in participation among low educated single parents in the 1990s has been attributed to the increased generosity of the EITC. The impact of apparently similar reforms in the UK appears to have been smaller. We argue that these differences can be attributed to four factors: the impact of interactions with other means tested benefits in the UK; the importance of workless couples with children in the UK, who make up nearly 50% of the recipients in the UK; the level of income support given to non-working parents in the UK; and the strength of the economic upturn in the US during the mid 1990s.

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  • Some Evidence on Race, Welfare Reform and Household Income

    “Some Evidence on Race, Welfare Reform and Household Income,” American Economic Review, Volume 93, Number 2, pp. 293-298, May 2003 (with Marianne Bitler and Jonah Gelbach).

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  • Another Look at Whether a Rising Tide Lifts All Boats

    Hoynes, Hilary. “Another Look at Whether a Rising Tide Lifts All Boats,” in The Roaring Nineties: Can Full Employment Be Sustained? edited by Alan Krueger and Robert Solow. Russell Sage Foundation: New York, 2001 (with James R. Hines, Jr. and Alan B. Krueger).

    Periods of rapid U.S. economic growth during the 1960s and 1970s coincided with improved living standards for many segments of the population, including the disadvantaged as well as the affluent, suggesting to some that a rising economic tide lifts all demographic boats. This paper investigates the impact of U.S. business cycle conditions on population well-being since the 1970s. Aggregate employment and hours worked in this period are strongly procyclical, particularly for low-skilled workers, while aggregate real wages are only mildly procyclical. Similar patterns appear in a balanced panel of PSID respondents that removes the effects of changing workforce composition, though the magnitude of the responsiveness of real wages to unemployment appears to have declined in the last 20 years. Economic upturns increase the likelihood that workers acquire jobs in sectors with positively sloped career ladders. Spending by state and local governments in all categories rises during economic expansions, including welfare spending, for which needs vary countercyclically. Since the disadvantaged are likely to benefit disproportionately from such government spending, it follows that the public finances also contribute to conveying the benefits of a strong economy to diverse population groups.

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  • Explaining the Fall and Rise in the Tax Cost of Marriage: The Effect of Tax Laws and Demographic Tre

    Hoynes, Hilary. “Explaining the Fall and Rise in the Tax Cost of Marriage: The Effect of Tax Laws and Demographic Trends, 1984-1997,” National Tax Journal, Volume 53, Number 3, Part 2, pp. 683-711, September 2000, (with Nada Eissa).

    This paper documents changes in the tax consequence of marriage over the period 1984 to 1997. Reversing the impact of the 1986 Tax Reform Act, tax acts in 1990 and 1993 are found to increasingly tax marriage. Our decomposition of different components show that, altogether, tax laws explain most (55–60 percent) of the change in the tax cost of marriage between 1984 and 1997. Our decompositions also show that the non–tax changes are almost exclusively driven by the changing labor market attachment of married women (as measured by their share of family earnings) and not by family size or total family income.

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  • Local Labor Markets and Welfare Spells: Do Demand Conditions Matter?

    Hoynes, Hilary. “Local Labor Markets and Welfare Spells: Do Demand Conditions Matter?” Review of Economics and Statistics, Volume 82, Number 3, pages 351-368, August 2000.

    This paper examines the impact of changes in labor market conditions on participation in the Aid to Families with Dependent Children (AFDC) program in California. Transitions off welfare and transitions back onto welfare are estimated using discrete duration models that control for local labor market conditions, demographic and neighborhood characteristics, duration effects, county-fixed effects, time effects, and county- speciŽfic time trends. The results show that higher unemployment rates, lower employment growth, lower employment-to-population ratios, and lower wage growth are associated with longer welfare spells and higher recidivism rates. Hispanics, blacks, and two-parent families are the groups that are most sensitive to changes in local labor market conditions.

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  • A Non-Experimental Analysis of ‘True’ State Dependence in Monthly Welfare Participation Sequences

    Hoynes, Hilary. “A Non-Experimental Analysis of 'True' State Dependence in Monthly Welfare Participation Sequences,” American Statistical Association, 1999 Proceedings of the Business and Economic Statistics Section, pp. 9-17 (with Kenneth Chay and Dean Hyslop).

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  • Differential Mortality and Wealth Accumulation

    Hoynes, Hilary. “Differential Mortality and Wealth Accumulation,” Journal of Human Resources, Volume 35, Number 1, pp. 1-29, Winter 2000 (with Orazio Attanasio).

    In this paper, we examine the role played by differential mortality in esti- mates of life cycle wealth profiles. Our study makes three contributions. First, we show that the Survey of Income and Program Participation (SIPP) provides reliable data on mortality as compared to the US life ta- ble data. Second, we provide estimates of the relationship between mortal- ity and wealth and show strong evidence of differential mortality. Lastly, and most importantly, we show that the differences in mortality by wealth-age profiles.

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  • The Employment and Earnings of Less Skilled Workers Over the Business Cycle

    Hoynes, Hilary. “The Employment and Earnings of Less Skilled Workers Over the Business Cycle,” in Finding Jobs: Work and Welfare Reform, edited by Rebecca Blank and David Card. Russell Sage Foundation: New York, 2000, pages 23-71.

  • Household Wealth of the Elderly Under Alternative Imputation Procedures

    in Inquiries In The Economics of Aging, edited by David Wise. University of Chicago Press: Chicago, 1998, 229-254. (with Michael Hurd and Harish Chand).

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  • Work, Welfare, and Family Structure: What Have We Learned?

    in Fiscal Policy: Lessons From Economic Research, edited by Alan Auerbach. MIT Press: Cambridge, Mass, 1997, 101-146

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  • Does Welfare Play Any Role in Female Headship Decisions?

    Journal of Public Economics, Volume 65 No. 2, 89-117, August 1997

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  • The Impact of Demographics on Housing and Non-Housing Wealth in the United States

     in The Economic Effects of Aging in the United States and Japan, edited by Michael D. Hurd and Naohiro Yashiro. University of Chicago Press: Chicago, 1997, 153-194. (with Daniel McFadden)

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  • The Effectiveness of Financial Work Incentives in DI and SSI: Lessons from Other Transfer Programs

    in Disability, Work and Cash Benefts, edited by Jerry Mashaw, Virginia Reno, Richard Burkhauser, and Monroe Berkowitz. Upjohn: Kalamazoo, Michigan, 1996, 189-222. (with Robert Moffitt)

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  • Welfare Transfers in Two-Parent Families

    Econometrica, Volume 64 No. 2, 295-332, March 1996

    Published Version (4MB)

  • Has the Decline in Benefits Shortened Welfare Spells?

    American Economic Review, Volume 84 No. 2, 43- 48, 1994. (with Thomas MaCurdy)

    Published Version (814KB)