Rothstein, Jesse - In: American Economic Journal: Economic Policy 2 (2010) 1, pp. 177-208
The EITC is intended to encourage work. But EITC-induced increases in labor supply may drive wages down. I simulate the economic incidence of the EITC. In each scenario that I consider, a large portion of low-income single mothers' EITC payments is captured by employers through reduced wages....