Estimating responses to changes in immigrant EITC eligibility
Abstract: The poverty alleviating effects and labor supply responses to the earned income tax credit (EITC) are well documented, but little is known about immigrant participation in the program. Since 1996 welfare reform, filing has required a social security number (SSN), thus excluding undocumented immigrants from claiming the federal tax credit. Since 2020, 11 states that offered a supplemental EITC expanded eligibility to tax filers using an individual taxpayer identification number (ITIN), effectively removing eligibility restrictions on undocumented immigrants. Using the Current Population Survey March supplement, I estimate the poverty and labor effects on likely undocumented immigrants with a difference-in-difference model. I find that families with newly eligible EITC filers are less likely to have household incomes below the poverty line, adjusted for differences in program eligibility. I find no evidence that changes in eligibility affect extensive margin labor supply among working age undocumented immigrants.