ACCI Conference 2024

The Earned Income Tax Credit (EITC) was temporarily expanded through the American Rescue Plan Act of 2021, allowing adults aged 65 and older to be eligible to receive the tax credit for the first time. The impacts of the additional income on spending among older adults is an important research topic that has so far received limited attention in the literature. We use data from the 2021 and 2022 Consumer Expenditure Interview Survey (CE) and imputed tax refund eligibility to examine how the EITC impacted overall spending as well as spending related to health and food. We employ a difference-in-differences approach to identify and estimate the effects of expanded EITC eligibility among older adults. Our research findings delve into whether and in what ways older adults utilized the EITC payment to potentially improve their overall well-being and health.

Author(s): Madelaine Reid L'Esperance, Madeline Reed-Jones