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  5. Long-Term and Intergenerational Effects of Government Policies
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Long-Term and Intergenerational Effects of Government Policies

Paper Session

Sunday, Jan. 5, 2025 10:15 AM - 12:15 PM (PST)

Hilton San Francisco Union Square, Union Square 22
Hosted By: American Economic Association
  • Chair: Emilia Simeonova, Johns Hopkins University

The EITC and Intergenerational Mobility

Randall Akee
,
University of California-Los Angeles
Maggie R. Jones
,
U.S. Census Bureau
Emilia Simeonova
,
Johns Hopkins University

Abstract

The effects of public policy on intergenerational social and economic mobility in the United States are not well understood. We study how the largest federal tax-based policy intended to promote work and increase incomes among the poor—the Earned Income Tax Credit (EITC)—affects the socio-economic standing of children who grew up in households affected by the policy. Using the universe of tax filer records for children linked to their parents and demographic and household information from census demographic data, we exploit exogenous differences by children’s ages in the births and “aging out” of siblings to assess the causal effect of EITC generosity on child outcomes—specifically, upward mobility in the child income distribution. Our findings suggest significant and mostly positive effects of more generous EITC refunds on the next generation that vary substantially depending on the age at first exposure to increased EITC and the duration of exposure. Evidence also suggests that exposure to more generous EITC in strengthens labor force attachment.

Can Public Policies Break the Gender Mold? Evidence from Paternity Leave Reforms in Six Countries

Libertad Gonzalez
,
Pompeu Fabra University
Sébastien Fontenay
,
Pompeu Fabra University

Abstract

We investigate the impact of paternity leave policies on gender role attitudes in the next generation. We measure gender-stereotypical attitudes using an Implicit Association Test with 3,000 online respondents in six countries. Using an RD design, we observe a significant reduction (-0.20 SD) in gender-stereotypical attitudes among men born post-paternity leave implementation. This shift influences career choices, as men whose fathers were affected by the reform are more inclined to pursue counter-stereotypical jobs, particularly in high-skilled occupations like healthcare and education. Our findings highlight how paternity leave fosters egalitarian gender norms and affects the occupational choices of the next generation.

The Effects of Universal Pre-K

Alexander Smith
,
West Point Academy
Andrew Barr
,
Texas A&M University
Jonathan Eggleston
,
U.S. Census Bureau

Abstract

Using universe United States tax data and a difference-in-differences approach that leverages the introduction of universal preschool in Georgia and Oklahoma, we show that universal preschool generated no average increases in earnings for individuals for whom the program was available in early childhood. These average null results obscure significant heterogeneity in the effects of preschool access. Children from low-income backgrounds appear to be no better off overall, and potentially harmed in Georgia, whereas those from families just outside of Head Start (a pre-existing comprehensive education, health, and nutrition program for low-income children in the United States) eligibility earn more as a result of universal preschool availability. A simple theory of treatment contrasts explains much of the heterogeneity in effects across natural subgroups and those constructed intentionally to maximize heterogeneity. Data driven approaches to identify treatment heterogeneity validate the importance of treatment contrast in explaining the observed effects, while also suggesting alternative forms of treatment heterogeneity that were not ex ante apparent. Estimated effects on intermediate outcomes, including educational attainment, incarceration, and receipt of government assistance, align with the pattern of effects on earnings.

Discussant(s)
Jacob Bastian
,
Rutgers University
Emilia Simeonova
,
Johns Hopkins University
Juanna Joensen
,
University of Chicago
JEL Classifications
  • I3 - Welfare, Well-Being, and Poverty
  • J0 - General