Title : Employment of Single Mothers: Child Care Costs and Effectiveness of the EITC

Authors : Begum Salma, Christopher Bollinger

Abstract : This paper examines the effect of the Earned Income Tax Credit (EITC) on labor force participation of single mothers by controlling for child care costs. Based on a simple model of utility maximizing households that jointly determine hours worked and hours of non-maternal child care demanded, I estimate the change in the labor force participation rate of single mothers following the EITC expansions of the 1990s. The data source for the study is topical module panels of the Survey of Income and Program Participation (SIPP) for the years 1992, 1993, 1996 and 2001. These panels were selected to reflect the time horizon during which the policy changes of the 1990s took place. The empirical estimation strategy is designed to deal with the problems of both selection bias and simultaneity in choosing hours worked and hours of non-maternal child care demanded. Due attention has been paid to the issue of identification of the empirical equations to be estimated in this paper.

Journal : Volume : Year : 2015 Issue :
Pages : City : New Orleans, Lousiana Edition : Editors :
Publisher : SEA, USA ISBN : Book : Chapter :
Proceeding Title : Southern Economic Association Annual Conference 2015 Institution : Issuer : Number :