The Earned Income Tax Credit and Short-Term Changes in Parents' Time Investments in Children.

Abstract

This study examined whether the addition of household resources via the receipt of the U.S. Earned Income Tax Credit (EITC) affects short-term patterns of parents’ time investments in children, including time spent engaged with children and in activities related to their education. Using difference-in-differences analyses that exploit seasonal variation in federal EITC outlays with nationally representative time-diary data from the 2003 to 2017 American Time Use Survey-Current Population Survey (ATUS-CPS; N = 61,355) merged with state-level data from the University of Kentucky Center for Poverty Research (UKCPR) National Welfare Database, I estimate the plausibly causal effects of predicted EITC receipt on various measures of parents’ time investments in their children. I examine parents’ time spent directly engaged with children in enriching activities like play and reading and in activities related to children’s education among a low-socioeconomic sample (parents with less than a college degree). I find few associations between monthly federal EITC outlays and immediate changes in parents’ time investments, although there was evidence that greater EITC outlays predicted small increases in mothers’ time spent reading with or to children, particularly among mothers with young children, but also small decreases in fathers’ time spent in activities with children, particularly school-age children. Findings suggest that increases in household resources, even relatively small and annual increases, may have short-term effects on parent–child interactions and time use.