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  4. May 2018
  5. Cash-on-Hand and College Enrollment: Evidence from Population Tax Data and the Earned Income Tax Credit

Cash-on-Hand and College Enrollment: Evidence from Population Tax Data and the Earned Income Tax Credit

  • Day Manoli
  • Nicholas Turner
American Economic Journal: Economic Policy
vol. 10, no. 2, May 2018
(pp. 242-71)
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Abstract

We estimate causal effects of cash-on-hand on college enrollment decisions of students from low-income families. Using population-level, administrative data from US income tax returns, we exploit variation in tax refunds received in the spring of the high school senior year. The variation in tax refunds results from the kink point between the phase-in and maximum credit portions of the Earned Income Tax Credit schedule. The results suggest tax refunds received in the spring of the high school senior year have meaningful effects on college enrollment.

Citation

Manoli, Day, and Nicholas Turner. 2018. "Cash-on-Hand and College Enrollment: Evidence from Population Tax Data and the Earned Income Tax Credit." American Economic Journal: Economic Policy, 10 (2): 242-71. DOI: 10.1257/pol.20160298

Additional Materials

JEL Classification

  • D14 Household Saving; Personal Finance
  • H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
  • I22 Educational Finance; Financial Aid
  • I23 Higher Education; Research Institutions
  • I24 Education and Inequality
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