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Federal Reserve Bank of Chicago
Economic Perspectives
How do EITC recipients spend their refunds?
Andrew Goodman-Bacon
Leslie McGranahan
Abstract

The authors determine what items are purchased using the earned income tax credit (EITC)—one of the largest sources of public support for lower-income working families in the U.S. They find that recipient households’ EITC payments are used primarily for vehicle purchases and transportation spending, both of which are crucial to job access and consistent with the EITC’s prowork goals.


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Andrew Goodman-Bacon & Leslie McGranahan, "How do EITC recipients spend their refunds?" , Federal Reserve Bank of Chicago, Economic Perspectives, issue Q II, pages 17-32, 2008.
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Keywords: Earned income tax credit ; Durable goods; Consumer
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