Discussion Paper series, Forschungsinstitut zur Zukunft der Arbeit 6680
The Earned Income Tax Credit (EITC) is the largest anti-poverty program in the U.S. In 1993, the EITC benefit levels were changed significantly based on the number of children in the family such that families with two or more children experienced an exogenous expansion in their incomes. Using data from the National Longitudinal Survey of Youth 1979 cohort, we employ a triple differences plus Fixed-Effects framework to examine the effect of this change on the probability of smoking among low-educated mothers. We find that the probability of smoking for white and Hispanic low-educated mothers of two or more children decreased statistically significantly relative to those with only one child, and the results are robust to various specification tests. These results provide new evidence on the protective effect of income on health through changes in health behaviors, and therefore have important policy implications.