This study examines the relationship between EITC laws and crime. Using data from 1999 to 2017, a period with 73 state EITC changes, I evaluate the effects of state-level EITCs on violent and property crime. Estimating difference-in-differences models, I find that higher EITCs are associated with significant reductions in violent crime, while not affecting property crimes. Introducing high state EITC is associated with a 10.0 percent reduction in violent crimes, which corresponds to 40 fewer crimes per 100,000 individuals. Event study estimates confirm the negative association between EITC generosity and violent crime.
|Journal||Contemporary Economic Policy|
|Publication status||Accepted/In press - 8 Dec 2020|
- Earned Income Tax Credit
- violent crime
- property crime