Summary of a Video Interview with Professor Kathryn Edin
January 2015. This page is a short summary written in our own words, not a transcript. Professor Edin’s own explanations are in her book, It’s Not Like I’m Poor: How Working Families Make Ends Meet in a Post-Welfare World, written with Sarah Halpern-Meekin, Laura Tach and Jennifer Sykes.
Why the book looks at tax credits
After the 1996 welfare reform, the main support for low-income families moved from people outside the workforce to people in work, and tax credits became a large part of that support. The research team followed roughly a hundred working families in Boston to see what the credits meant in daily life and where the money went. Professor Edin describes the main finding as a change in how families plan: money that usually runs out each month becomes, for a few weeks after the refund arrives, a chance to think about school, a car, clearing a credit record or saving toward a home. She also argues that, unlike welfare, the EITC tends to leave recipients feeling included, and she notes that families spent a small part of their refund on treats that let children feel like everyone else. Most of the fieldwork dates from 2006, and she says more recent work suggests the hope of owning a home survived the recession, although family budgets only got tighter.
Why interviews, and what they cannot show
Surveys can show how many people claim the EITC and what they earn. Interviews show how families budget a single large payment and what the money means to them. Professor Edin reports that families link tax credits with work and mostly use the refund either to pay down past debt or to build a base for the future. To keep the sample from being too narrow, the team combined in-depth interviews with short surveys at commercial tax preparers, volunteer tax sites and Head Start centers, and compared the results with national surveys where possible.
The EITC, poverty and low-wage work
She explains the EITC’s lasting political support by its design: it rewards work, which fits widely held American values, so it draws backing from both parties. She also raises two caveats. Tax credits can end up supporting employers who pay low wages, and low-wage work is a problem of too few and unpredictable hours as well as low pay. In her view the credit is one tool among several, alongside wider access to full-time work and a stronger safety net (TANF) for people who cannot work, since only about a quarter of poor families receive anything from it.
Quarterly payments versus a lump sum
Professor Edin supports testing quarterly EITC payments, because families are usually in debt by tax time and about a quarter of the refund goes to repaying it. She also cautions that many families prefer the lump sum, and some deliberately over-withhold to create forced savings, so any change should be tried carefully and judged by what the money means to families as well as by how it is spent.