Evaluating the Impact of the Earned Income Tax Credit on Health Insurance Coverage

The goals and design of the Earned Income Tax Credit suggest that it has the potential to affect private health insurance coverage rates in its target population through income, tax price and employment effects. Results from an analysis using data from the National Longitudinal Survey of Youth show that the EITC expansion of the mid-1990s did increase the rate of employer-based health insurance coverage in the low-skilled population. The overall effect of EITC expansions was to increase the probability of coverage by 3.8 percentage points, or approximately 375,000 more individuals who were covered by employer-provided policies between 1992 and 1998.