Health Effects of the 2021 Earned Income Tax Credit Expansion on Young Adults Without Children

Policy Points In 2021, young adults without children became (temporarily) newly eligible for the earned income tax credit, the largest US poverty alleviation program. This 2021 expansion was associated with fewer poor mental health days and modest improvements in physical health. This study suggests the importance of providing economic support for young adults at this critical juncture of the life course, when they are ineligible for many other social safety net benefits.

In 2021, Congress expanded the earned income tax credit (EITC)-the largest US poverty alleviation program-to young adults without children who had previously been ineligible. The EITC improves health by targeting poverty as a social determinant of health, but no studies have examined health effects of the 2021 expansion on this newly eligible population during this critical period of their life span. This study addresses this gap in the literature.

We used 2021-2023 serial cross-sectional data from the Behavioral Risk Factor Surveillance System (N = 11,137), restricting the analysis to low-income young adults without children. We used quasi-experimental difference-in-differences and event study models to evaluate the impact of the EITC expansion on self-reported health and health behaviors. We considered (newly eligible) young adults aged 18 to 24 years without children to be exposed and those aged 25 to 34 years (already eligible) to be unexposed. We compared those interviewed during the EITC expansion to those interviewed before the expansion and after its expiration. Outcomes included mental and physical health in the past 30 days and binge drinking. Models were adjusted for self-reported demographic covariates and month and state fixed effects. We carried out numerous sensitivity analyses.

In difference-in-differences models, the 2021 EITC expansion was associated with fewer poor mental health days (-1.08; 95% CI -1.94 to -0.23). Event study models confirmed this and also demonstrated modest improvements in physical health. There were no effects on binge drinking. Effects were similar among various subgroups (i.e., sex, race/ethnicity). Results were robust to sensitivity analyses.

Expanding the EITC improved the health and well-being of young adults without children, a group often left out of US safety net programs during this key juncture of the life course. This study informs ongoing decisions regarding EITC policy design at the state and federal levels.