Do Larger Earned Income Tax Credit and Supplemental Nutrition Assistance Program Benefits Create Complementary Effects on Child Development?
摘要
Poverty is particularly concerning during early childhood and the early school years, as it can negatively impact child development both in the short and long term. To alleviate economic hardship, the U.S. government provides a patchwork of income support policies. This paper examines two of the largest programs, the Supplemental Nutrition Assistance Program (SNAP) and the Earned Income Tax Credit (EITC), which low-income working families often receive simultaneously. This paper is the first to explore whether these benefits interact to influence children's early cognitive development in families receiving both programs. To address endogeneity of program benefits, I use a two-way (child and year) fixed effects model to leverage the variation in the maximum federal and state EITC benefits stemming from changes in the number of children and state EITC policies, as well as the variation in SNAP purchasing power driven by local food prices over time within each child, rather than actual benefit amounts. Using data from the Early Childhood Longitudinal Study-Birth Cohort (which tracks a nationally representative 2001 birth cohort through the kindergarten-entry period), I find new population-level evidence that EITC benefits are effective at improving early math and reading skills when coupled with greater SNAP purchasing power, and vice versa (sample size = 1300). Suggestive evidence is provided on the mechanisms underlying such complementary effects on early cognitive outcomes. The findings highlight the importance of enhancing the reach and generosity of both programs.