@article{38c25ec0bdf94e8bb99cd22b8a436675,
title = "TIMING IS MONEY: DOES LUMP-SUM PAYMENT OF THE EARNED INCOME TAX CREDIT AFFECT SAVINGS AND DEBT?",
abstract = "Earned income tax credit (EITC) benefit income is paid out in a lump-sum around tax time. We investigate whether savings and debt among EITC-eligible families reflect the timing of payments. Using nationally representative, individual-level data on self-reported debt and savings outcomes, we search for differences in monthly behavior between EITC-eligible and -ineligible households. We find evidence that credit card and unsecured debt holding among EITC-eligible families reflects the timing of the EITC, with low debt levels at tax time relative to other months. Debt holding among ineligible families with children does not exhibit a similar pattern. We find limited evidence of intrayear patterns in savings behavior among EITC-eligible families. (JEL D14, I38, H23).",
author = "Jones, {Lauren E.} and Katherine Michelmore",
note = "Funding Information: ∗The authors wish to thank Quentin Brummet, Jacob Goldin, Tatiana Homonoff, Mike Lovenheim, Luke Shaefer, Stefanie Stancheva, Tansel Yilmazer, Gal Zauberman, and seminar participants at The Ohio State University, the University of Michigan, and the University of Toronto for helpful comments. Michelmore also acknowledges financial support from the Institute of Education Sciences, for support on grant R305B110001. Any remaining errors are our own. Jones: Assistant Professor, Department of Human Sciences, The Ohio State University, Columbus, OH 43210. Phone 614-962-0094, E-mail jones.2846@osu.edu Michelmore: Assistant Professor, Department of Public Administration and International Affairs, Maxwell School of Citizenship and Public Affairs, Syracuse University, Syracuse, NY 13244. Phone 315-443-9049, E-mail kmmichel@syr.edu 1. In Australia and New Zealand, families are given the choice of whether to receive the money as a lump-sum or Economic Inquiry (ISSN 0095-2583) Vol. 57, No. 3, JULY 2019, 1659–1674 Publisher Copyright: {\textcopyright} 2019 Western Economic Association International",
year = "2019",
month = jul,
doi = "10.1111/ecin.12788",
language = "English (US)",
volume = "57",
pages = "1659--1674",
journal = "Economic Inquiry",
issn = "0095-2583",
publisher = "Wiley-Blackwell",
number = "3",
}