The Impact of the Earned Income Tax Credit and Social Policy Reforms on Work, Marriage, and Living Arrangements

This article examines the impact of the recent dramatic changes in the social policies, particularly the expansion of the EITC and Welfare reform on labor supply, marriage, and cohabitation. Altered policies have increased incentives to work or marry for some, diminished incentives for others. The results strongly indicate expanded work by single mothers and reductions of work by married mothers in accordance with their changed incentives. By contrast, estimated impacts on marriage are small and ambiguous, though modest changes in cohabitation in the predicted direction suggest that impact on family structure might become more apparent in the future.