Abstract

The Earned Income Tax Credit (EITC) has been credited with reductions in poverty and increases in the labor force participation of single mothers. The credit has the potential to affect the health of children in recipient families through three channels: family income, maternal employment, and health insurance coverage patterns. We exploit variation in state-level EITCs to estimate the effects of the credit on health insurance coverage, utilization of medical care, and health status. We find that the EITC is associated with significant changes in health insurance coverage patterns for children age 6–14, increasing rates of private health insurance but producing offsetting decreases in public coverage. State EITCs are also associated with significant improvements in health status for older children, an effect consistent with higher family income.

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