Buhlmann, Florian; Elsner, Benjamin; Peichl, Andreas - 2017
Welfare programs are important for reducing poverty but create incentives for recipients to maximize their income by … either reducing labor supply or manipulating taxable income. In this paper, we quantify the extent of such behavioral … responses for the Earned Income Tax Credit (EITC) in the US. We exploit that US states can set top-up rates, which means that …