The Impact of Family Income on Child Achievement: Evidence from the Earned Income Tax Credit

Using a panel of 4,500 children matched to their mothers from National Longitudinal Survey of Youth datasets, authors analyze the impact of a family’s income on child achievement to understand possible causal effects an increase in family income, such as through the Earned Income Tax Credit (EITC). Specifically, a $1,000 increase in income is shown to equate to child gains in reading and math test scores, and the increase in scores is larger for children in more disadvantaged families.