Lifetime Patterns of Earned Income Tax Credit Eligibility and Cognition: A Sequence Analysis Approach

Area of Science:

• Public Health
• Economics
• Gerontology

Background:

• The Earned Income Tax Credit (EITC) is a major US poverty-reduction program.
• While short-term health benefits are known, long-term EITC impacts on cognition are understudied.

Purpose of the Study:

• To analyze lifecourse Earned Income Tax Credit (EITC) eligibility patterns.
• To evaluate the association between these patterns and cognitive function in later life.

Main Methods:

• Retrospective cohort study using National Longitudinal Survey of Youth 1979 data (1979-2018).
• Categorized annual EITC eligibility (ages 25-45) into 'eligible,' 'ineligible (no income),' or 'ineligible (above threshold).'
• Used sequence and cluster analysis to identify EITC trajectories; linear regression examined cognition around age 48.

Main Results:

• Identified 11 EITC eligibility clusters, including 'graduates,' 'long-term eligible,' 'intermittent,' and 'long-term ineligible (no income).'
• EITC 'graduates' showed similar cognition to the reference group.
• Prolonged EITC eligibility or intermittent eligibility correlated with worse cognition.
• Long periods of ineligibility due to no income were associated with the poorest cognitive outcomes.

Conclusions:

• Temporary Earned Income Tax Credit (EITC) use may aid temporary poverty alleviation and predict later cognition.
• Individuals unable to participate in the labor force may require additional support to mitigate financial adversity and its cognitive consequences.