Goldman School of Public Policy - University of California, Berkeley

Selected Publications

  • Effective Policy for Reducing Poverty and Inequality? The Earned Income Tax Credit and the Distribution of Income

    Forthcoming, Journal of Human Resources. (Joint with Ankur Patel)

    We examine the effect of the EITC on the poverty and income of single mothers with children using a quasi-experiment approach that leverages variation in generosity due to policy expansions across tax years and family sizes. We find that the income increasing effects of the EITC are concentrated between 75% and 150% of income-to-poverty with little effect at the lowest income levels (50% poverty and below) and at levels of 250% of poverty and higher. Specifically, a policy-induced $1000 increase in the EITC leads to an 8.4 percentage point reduction in the share of families with after tax and transfer income below 100% poverty. These results are robust to a rich set of controls and whether we compare single women with and without children or compare women with one child versus women with two or more children. They are also robust to whether we limit our analysis to the sharp increase in the 1993 expansion or use the full period of policy expansion, back to the 1986 Tax Reform Act. Importantly, event study estimates show no evidence of differential pre-trends, providing strong evidence in support of our research design. We use these results to show that by capturing the indirect effects of the credit on earnings, static calculations of the anti-poverty effects of the EITC (such as those released based on the Supplemental Poverty Measure) may be underestimated by almost 50 percent. Ours is the first paper to simultaneously estimate the combined direct and indirect effects of the EITC, to quantify how much we miss by ignoring the behavior effect, and to estimate the effects across the income distribution. 

  • Child Poverty, the Great Recession, and the Social Safety Net in the United States

    Marianne Bitler, Hilary Hoynes and Elira Kuka (2017). Journal of Policy Analysis and Management, Vol 36, Issue 2, pp. 358-389.

    In this paper, we comprehensively examine the effects of the Great Recession on child poverty, with particular attention to the role of the social safety net in mitigating the adverse effects of shocks to earnings and income. Using a state panel data model and data for 2000 to 2014, we estimate the relationship between the business cycle and child poverty, and we examine how and to what extent the safety net is providing protection to at-risk children. We find compelling evidence that the safety net provides protection; that is, the cyclicality of after-tax-and-transfer child poverty is significantly attenuated relative to the cyclicality of private income poverty. We also find that the protective effect of the safety net is not similar across demographic groups, and that children from more disadvantaged backgrounds, such as those living with non-Hispanic black or Hispanic, single, or particularly immigrant household heads-or immigrant spouses, experience larger poverty cyclicality than non-Hispanic white, married, or native household heads with native spouses. Our findings hold across a host of choices for how to define poverty. These include measures based on absolute thresholds or more relative thresholds. They also hold for measures of resources that include not only cash and near cash transfers net of taxes but also several measures of medical benefits.

  • Do In-Work Tax Credits Serve as a Safety Net?

    Marianne Bitler, Hilary Hoynes and Elira Kuka, 2017. Journal of Human Resources Vol 36, Issue 2, pp. 358-389.

    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 2012, we spent more than 7 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 demonstrates 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 an increase in EITC recipients and total dollar amounts of credits for married couples. On the other hand, the effect of business cycles on use of the EITC is insignificant for single individuals, whether measured by the number of recipients or expenditures. Estimates that further cut by education show that the protective effects of the EITC are concentrated among those with higher skills (and potential earnings). In sum, our results show that the EITC serves to mitigate the effects of income shocks for married couples with children and other groups likely to have moderate earnings, but does not do so 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 vary across family type and skill group.

  • Tax Policy Toward Low-Income Families

    The Economics of Tax Policy, Oxford Unviersity Press, Edited by Alan Auerbach and Kent Smetters, 2017. (Joint with Jesse Rothstein)

    In this paper, we review the most prominent provision of the federal income tax code that targets low-income tax filers, the Earned Income Tax Credit (EITC), as well as the structurally similar Child Tax Credit (CTC). We frame the paper around what we see as the programs’ goals: distributional, promoting work, and limiting administrative and compliance costs. We review what is known about program impacts and distributional consequences under current law, drawing on simulations from the Tax Policy Center. We conclude that the EITC is quite successful in meeting its three goals. In contrast, most of the benefits of the CTC go to higher income households. In addition to analyzing current law, we assess possible reforms that would reach groups – for the EITC, those without children; for the CTC, those with very low earnings – who are largely missed under current policy.

  • The EITC: A Key Policy to Support Families Facing Wage Stagnation

    IRLE Policy Brief, Institute for Research on Labor and Employment, UC Berkeley, January 2017.

  • Illegality: A Contemporary Portrait of Immigration

    Gonzales, Roberto G., and Steven Raphael (2017), “Illegality: A Contemporary Portrait of Immigration,” RSF: The Russell Sage Foundation Journal of the Social Sciences, 3(4): 1–17.

  • U.S. Food and Nutrition Programs

    Economics of Means-Tested Transfer Programs in the United States, Volume I, University of Chicago Press, Robert Moffitt Editor, 2016. (Joint with Diane Schanzenbach)

  • Do Politicians Use Policy to Make Politics? The Case of Public-Sector Labor Laws

    Anzia, Sarah F., and Terry M. Moe. 2016. "Do Politicians Use Policy to Make Politics? The Case of Public-Sector Labor Laws." American Political Science Review 110 (4): 763-777.

    Schattschneider’s insight that “policies make politics” has played an influential role in the modern study of political institutions and public policy. Yet if policies do indeed make politics, rational politicians have opportunities to use policies to structure future politics to their own advantage—and this strategic dimension has gone almost entirely unexplored.  Do politicians actually use policies to make politics?  Under what conditions?  In this paper, we develop a theoretical argument about what can be expected from strategic politicians, and we carry out an empirical analysis on a policy development that is particularly instructive: the adoption of public-sector collective bargaining laws by the states during the 1960s, 1970s, and early 1980s—laws that fueled the rise of public-sector unions, and “made politics” to the advantage of Democrats over Republicans.