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Tots or Teens: How Does Child’s Age Influence Maternal Labor Supply Response to the Earned Income Tax Credit?

Updated July 2020

Katherine Michelmore, Syracuse University
Natasha V. Pilkauskas, University of Michigan

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Building on earlier work that shows that the Earned Income Tax Credit (EITC) has a substantial positive effect on maternal labor supply, we show that labor supply effects are concentrated among mothers with children under age three, with only moderate effects of the EITC on the labor supply of mothers with teenagers. These increases in labor supply are coupled with large increases in the use and cost of child care among mothers with children under age three. Results highlight the importance of considering heterogeneous treatment effects of policy and have implications for child care policy and other family policy.