Earned Income Subsidies, Female Labor Supply, and Child Outcomes
Early Career Research Award
The goal of this project is to estimate the causal effects of earned income subsidies on women’s labor supply and their children’s human capital. To this end, we exploit a unique setting in Chile, where an earnings subsidy program—otherwise similar to the Earned Income Tax Credit in the United States—provides benefits only for woman below a target defined by a vulnerability score. Using administrative data on nearly two million potential beneficiaries, their labor market outcomes, and their children’s academic performance, we propose a Regression Discontinuity design to estimate causal effects of the program on women’s labor supply and on their children’s human capital. Our project seeks to provide new evidence about this important policy drawing from unique data and research design.