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Title: The Impact of Family Income on Child Achievement: Evidence from the Earned Income Tax Credit
Resulting in 1 citation.
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Dahl, Gordon B. Lochner, Lance John |
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The Impact of Family Income on Child Achievement: Evidence from the Earned Income Tax Credit CIBC Working Paper Series, Working Paper #2011-3, Department of Economics, Social Science Centre, The University of Western Ontario, 2011. Also: http://economics.uwo.ca/centres/cibc/wp2011/Dahl_Lochner03.pdf Cohort(s): Children of the NLSY79 Publisher: Economics Department, Queens University Keyword(s): Achievement; Child Development; Children, Academic Development; Children, Poverty; Earned Income Tax Credit (EITC); Endogeneity; Family Income; Family Influences; Heterogeneity; Modeling, Fixed Effects; Peabody Individual Achievement Test (PIAT- Math); Peabody Individual Achievement Test (PIAT- Reading) Permission to reprint the abstract has not been received from the publisher. Past estimates of the effect of family income on child development have often been plagued by endogeneity and measurement error. In this paper, we use an instrumental variables strategy to estimate the causal effect of income on children’s math and reading achievement. Our identification derives from the large, non-linear changes in the Earned Income Tax Credit (EITC) over the last two decades. The largest of these changes increased family income by as much as 20%, or approximately $2,100, between 1993 and 1997. Using a panel of roughly 4,500 children matched to their mothers from National Longitudinal Survey of Youth datasets allows us to address problems associated with unobserved heterogeneity, endogenous transitory income shocks, and measurement error in income. Our baseline estimates imply that a $1,000 increase in income raises combined math and reading test scores by 6% of a standard deviation in the short-run. Test gains are larger for children from disadvantaged families and are robust to a variety of alternative specifications. |
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Bibliography Citation
Dahl, Gordon B. and Lance John Lochner. "The Impact of Family Income on Child Achievement: Evidence from the Earned Income Tax Credit." CIBC Working Paper Series, Working Paper #2011-3, Department of Economics, Social Science Centre, The University of Western Ontario, 2011. |