Poverty, Pregnancy, and Birth Outcomes: A Study of the Earned Income Tax Credit

Background: Economic interventions are increasingly recognised as a mechanism to address perinatal health outcomes among disadvantaged groups. In the US, the earned income tax credit (EITC) is the largest poverty alleviation programme. Little is known about its effects on perinatal health among recipients and their children. We exploit quasi-random variation in the size of EITC payments to examine the effects of income on perinatal health.

Methods: The study sample includes women surveyed in the 1979 National Longitudinal Survey of Youth (n = 2985) and their children born during 1986-2000 (n = 4683). Outcome variables include utilisation of prenatal and postnatal care, use of alcohol and tobacco during pregnancy, term birth, birthweight, and breast-feeding status. We first examine the health effects of both household income and EITC payment size using multivariable linear regressions. We then employ instrumental variables analysis to estimate the causal effect of income on perinatal health, using EITC payment size as an instrument for household income.

Results: We find that EITC payment size is associated with better levels of several indicators of perinatal health. Instrumental variables analysis, however, does not reveal a causal association between household income and these health measures.

Conclusions: Our findings suggest that associations between income and perinatal health may be confounded by unobserved characteristics, but that EITC income improves perinatal health. Future studies should continue to explore the impacts of economic interventions on perinatal health outcomes, and investigate how different forms of income transfers may have different impacts.