Three essays in applied public economics

This dissertation comprises three chapters studying the impact of social safety net policies on the lives of low-income individuals in the United States. The first chapter investigates the causal effect of providing cash to low-income families immediately after childbirth on the criminal justice involvement of these families. I employ a regression discontinuity design, using the fact that children born to low-income families before the year-end can be claimed as dependents on that year’s tax returns, resulting in significantly larger refundable tax credits during the child’s first year compared to families with children born in January. Utilizing linked administrative data on birth records and criminal justice involvement from a large U.S. metropolitan county, I find that eligibility for additional income during the first year of parenthood reduces the likelihood of a criminal charge for fathers by 1.2 percentage points (57%) within one year after childbirth. This effect persists for up to ten years after childbirth. The immediate decrease in criminal charges for fathers is particularly evident in income-generating offenses such as robbery, theft, as well as drug possession, and driving under the influence. The effect also extends to the criminal activity of children, with male children born before January 1 showing a reduced likelihood of having any juvenile justice case during their teenage years and a reduced likelihood of incarceration in their adult years. The second chapter examines the labor market effects of eliminating the Earned Income Tax Credit (EITC) for undocumented immigrants by requiring a Social Security number to claim the credit. Using the Survey of Income and Program Participation (SIPP) data and comparing likely undocumented immigrants with natives, the analysis reveals a significant decrease in the likelihood of undocumented immigrants receiving the EITC following the policy change in 1996. By utilizing the Current Population Survey (CPS) data and exploiting variations in whether undocumented single mothers have children, the timing of the policy, and a placebo group of undocumented married men, the study demonstrates that the termination of the EITC resulted in a 6-9 percentage point reduction in the extensive margin labor supply of undocumented single mothers. These findings underscore the double disadvantage faced by the children of undocumented single mothers, who are predominantly U.S. citizens living in low-income households. Not only do they lack access to the tax credit, but their mothers’ labor supply and overall family income are also negatively impacted. In the third chapter, co-authored with Daniel Tabak, we investigate the effect of losing social safety net benefits on local household financial distress and crime. We estimate this effect using a quasi-experiment in which Indiana outsourced and automated the processing of Temporary Assistance for Needy Families (TANF), food stamps, and Medicaid applications. The automation policy was implemented in three waves before its cancellation in 2009, before reaching all counties. Using consumer credit panel data, we explore this variation to find that the Indiana welfare automation program, which reduced enrollment in SNAP and TANF, significantly increased the number of accounts in collections, collections balances, bankruptcy filings, and decreased credit scores. Using data from the Uniform Crime Reporting series, we find that the welfare automation policy has also increased crime, primarily property crimes.

Name thesis:degree_name

Ph.D.

Level thesis:degree_level

Dissertation

Discipline thesis:degree_discipline

Economics

Grantor

University of Illinois at Urbana-Champaign

Year dc:date

2024

Author dc:creator

• Bhardwaj, Sakshi

Contributors dc:contributor

• Marx, Benjamin
• Powers, Elizabeth
• Garin , Andrew
• Borgschulte, Mark

• Safety Net
• Eitc
• Ctc
• Crime
• Low-income People
• Undocumented Immigrants
• Labor Supply
• Tax Credit

Statement dc:rights

• Copyright 2024 Sakshi Bhardwaj

Language dc:language

en, eng

Handle dc:identifier

https://hdl.handle.net/2142/124252

OAI record oai:identifier

https://www.ideals.illinois.edu/oai-pmh?verb=GetRecord&metadataPrefix=etdms&identifier=oai%3Awww.ideals.illinois.edu%3A2142%2F124252