Has the EITC’s Effectiveness Been Underestimated?

A new policy brief from the Institute for Research on Labor and Employment at the University of California at Berkeley – The Earned Income Tax Credit: A Key Policy to Support Families Facing Wage Stagnation – looks at the direct and indirect impact of the EITC by reviewing its benefits beyond cash value and examining how the policy encourages additional work. Berkeley Professor and report author Hillary Hoynes notes that the research shows that “the true anti-poverty effects of the EITC have been underestimated by up to 50 percent.”