Job Market Paper: Working Mothers and EITC

The Job Market Paper series highlights Ph.D. students in economics working on gender-related topics and currently on the job market. Email me if you are on the junior job market and would like me to link to your paper. I will try to post as many as I can.

Jacob Bastian, University of Michigan

Paper: The Rise of Working Mothers and the 1975 Earned Income Tax Credit

The rise of working mothers radically changed the U.S. economy and the role of women in society. Time-series data show a rapid increase in the employment of mothers—relative to women without children—beginning in the mid-1970s. In one of the first systematic studies of the 1975 introduction of the Earned Income Tax Credit (EITC), I find that this program led to a 4-percentage-point (or 7 percent) rise in maternal employment—representing about one million mothers—and conclude that the EITC can help explain why the U.S. has such a high fraction of working mothers despite few childcare subsidies or parental-leave policies. I then test whether the EITC affected attitudes towards working women. I find that states with larger EITC responses—and larger predicted responses based on pre-1975 demographic and occupational traits—had larger post-1975 increases in attitudes approving of women working. Results are largest among lower-education men—who were most exposed to these newly working women—and do not appear to be driven by pre-1975 attitudes, demographic changes, or general trends in social norms. I also use racial attitudes as a placebo outcome. As a check on whether large increases of female workers can affect social attitudes, I also find attitude changes from increased female employment during World War II.