Working Paper: NBER ID: w19836
Authors: Dayanand S. Manoli; Nicholas Turner
Abstract: We estimate causal effects of cash-on-hand on college enrollment decisions of students from low-income families. Using population-level, administrative data from United States income tax returns, we exploit variation in tax refunds received in the spring of the high school senior year. The variation in tax refunds results from the kink point between the phase-in and maximum credit portions of the Earned Income Tax Credit schedule. The results suggest tax refunds received in the spring of the high school senior year have meaningful effects on college enrollment.
Keywords: cash-on-hand; college enrollment; tax refunds; low-income families; EITC
JEL Codes: H24; I23; I28
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| cash-on-hand (E41) | college enrollment rates (I23) |
| tax refunds (H20) | college enrollment rates (I23) |
| cash-on-hand (E41) | college enrollment decisions in subsequent years (I23) |
| timing of cash transfers (F16) | college enrollment rates (I23) |
| cash-on-hand (E41) | alleviation of credit constraints (E51) |
| tax refunds (H20) | college enrollment for low-income families (I24) |
| tax refunds (H20) | college enrollment for higher-income families (I23) |