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Bringing Economic Research into Public Policy Discussions

Paper Session

Friday, Jan. 4, 2019 8:00 AM - 10:00 AM

Atlanta Marriott Marquis, International 8
Hosted By: American Economic Association
  • Chair: Jay Shambaugh, George Washington University and Brookings Institution

Making Work Pay Better Through an Expanded Earned Income Tax Credit

Jesse Rothstein
,
University of California-Berkeley
Hilary Hoynes
,
University of California-Berkeley
Krista Ruffini
,
University of California-Berkeley

Abstract

The Earned Income Tax Credit (EITC) is a refundable tax credit that promotes work. Research has shown that it also reduces poverty and improves health and education outcomes. The maximum credit for families with two or fewer children has remained flat in inflation-adjusted terms since 1996. Over the same period, earnings prospects have stagnated or diminished for many Americans, and prime-age employment rates have fallen. This paper proposes to build on the successes of the EITC with a ten percent across-the-board increase in the federal credit. This expansion would provide a meaningful offset to stagnating real wages, encourage more people to enter employment, lift approximately 600,000 individuals out of poverty, and improve health and education outcomes for millions of children.

Reforming Non-competes to Support Workers

Matthew Marx
,
Boston University

Abstract

This report describes evidence from empirical research on non-compete agreements and recommends policies to balance the interests of firms and workers. Firms use non-competes widely in order to minimize recruiting costs, safeguard investments, and protect intellectual property more easily than is achieved via non-disclosure agreements. But these benefits come at a cost to workers, whose career flexibility is compromised—often without their informed consent.

Public Investments in Child Care

Elizabeth Cascio
,
Dartmouth College

Abstract

Child care is a necessity for working women with young children. Yet, the costs of high-quality center-based child care in the United States—particularly for children under age five—are prohibitively high for many families. In this proposal, I describe a multifaceted approach to child-care policy that reduces the financial burden of child care, encourages maternal employment, and supports child development. I propose to replace existing federal child-care tax policies with a single refundable federal child-care tax credit that is more generous to lower-income families and families with children under the age of five. To address child care quality, I propose investments in Quality Rating and Improvement Systems and in expansion of universal preschool for four-year-olds. State and local governments could pursue these investments on their own or with federal assistance.
Discussant(s)
Jay Shambaugh
,
George Washington University and Brookings Institution
Janice Eberly
,
Northwestern University
Adam Looney
,
Brookings Institution
JEL Classifications
  • J0 - General
  • H0 - General