Working Paper: NBER ID: w14836
Authors: Raj Chetty; Emmanuel Saez
Abstract: This paper tests whether providing information about the Earned Income Tax Credit (EITC) affects EITC recipients' earnings decisions. We conducted a randomized experiment with 43,000 EITC recipients at H&R Block in which tax preparers gave simple, personalized information about the EITC schedule to half of their clients. We find no significant effects of information provision on earnings in the subsequent year in the full sample. Further exploration uncovers evidence of heterogeneous treatment effects on both self-employment income and wage earnings across the 1,461 tax professionals who assisted the clients involved in the experiment. We conclude that providing information about tax incentives through tax preparers does not systematically affect earnings on average. However, tax preparers may be able to influence their clients' earnings decisions by providing advice about how to respond to tax incentives.\n
Keywords: No keywords provided
JEL Codes: H31; J22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Providing information about the EITC (H26) | Earnings decisions of tax filers (H31) |
| Providing information about the EITC (H26) | EITC amounts (H26) |
| Self-employment status (L26) | Earnings decisions of tax filers (H31) |
| Complying tax professionals (H26) | EITC amounts (H26) |
| Non-complying tax professionals (H26) | Overall earnings (J31) |