The short-term impacts of Earned Income Tax Credit disbursement on health

Abstract

BACKGROUND: There are conflicting findings regarding long- and short-term effects of income on health. Whereas higher average income is associated with better health, there is evidence that health behaviours worsen in the short-term following income receipt.Prior studies revealing such negative short-term effects of income receipt focus on specific subpopulations and examine a limited set of health outcomes. METHODS: The United States Earned Income Tax Credit (EITC) is an income supplement tied to work, and is the largest poverty reduction programme in the USA. We utilize the fact that EITC recipients typically receive large cash transfers in the months of February,March and April, in order to examine associated changes in health outcomes that can fluctuate on a monthly basis. We examine associations with 30 outcomes in the categories of diet, food security, health behaviours, cardiovascular biomarkers, metabolic biomarkers and infection and immunity among 6925 individuals from the U.S. National Health and Nutrition Survey. Our research design approximates a natural experiment,since whether individuals were sampled during treatment or non-treatment months is independent of social, demographic and health characteristics that do not vary with time. RESULTS: There are both beneficial and detrimental short-term impacts of income receipt.Although there are detrimental impacts on metabolic factors among women, most other impacts are beneficial, including those for food security, smoking and trying to lose weight. CONCLUSIONS: The short-term impacts of EITC income receipt are not universally health promoting, but on balance there are more health benefits than detriments.