The Effects of the 1993 Earned Income Tax Credit Expansion on the Labor Supply of Unmarried Women

Abstract

The Earned Income Tax Credit (EITC) expansion in 1993 has substantially increased the benefit available to a family with two or more children compared to a family with one child and to a family with no children. Using national survey data and this differential increase in EITC benefits, this study examines the effect of the 1993 EITC expansion on the labor supply of unmarried women. I find that the 1993 expansion has substantially increased the labor force participation of those women with two or more children. Moreover, the increase in the participation rate was mainly from less-educated women, the target population of the EITC program. Regarding the hours of work, I find evidence that the expansion increased total hours worked by all unmarried women. However, I find no evidence of statistically significant changes in annual hours worked by currently unmarried female workers.