2013 Conference

Financial Services

Financial Services

The Earned Income Tax Credit (EITC) seeks to reduce poverty and to provide the resources necessary for an individual to become self-sufficient. However, recent evidence suggests that the upward economic mobility provided by the EITC in practice is limited. To investigate the factors associated with achieving this upward mobility, this study utilized the theory of planned behavior to determine if (a) attitudes – as measured by time preference and self-esteem, (b) subjective norms – as measured by education, parents’ poverty level or work status, and religiosity, and/or (c) perceived behavioral control – as measured by locus of control, were significant in transitioning off of the EITC. Using data from the National Longitudinal Survey of Youth (NLSY79), the EITC utilization pattern of a sample of 178 individuals was investigated. Results indicate that marital status, being male, and having an internal locus of control significantly affected an individual’s ability to transition off of the EITC.