MassBudget Study: Positive Health Effects of Earned Income Tax Credit
May 23, 2018
In the worlds of health care policy and delivery, there is increasing recognition that addressing the social determinants of health (SDOH) –access to nutritious foods, affordable housing, safe neighborhoods, dependable transportation, well-paying jobs and safety from violence—is essential to improving health outcomes, containing health care costs and addressing health inequities across race and income. In other words, health care is about even more than having insurance coverage and receiving traditional medical care.
The Massachusetts Budget and Policy Center (MassBudget) recently released issue briefs on the health effects of the Earned Income Tax Credit (EITC) and Paid Family & Medical Leave (PFML). MassBudget presents research showing that both policies improve the health of individuals, families and communities by addressing economic hardship and promoting the family and social support that contribute to better health.
These are live issues now. The Senate budget being debated this week includes an increase in the state EITC, as did the House budget and Governor’s Baker’s budget proposal. In addition, PFML is a proposed initiative to be before state voters this fall.
Each year over 400,000 Massachusetts tax filers claim the EITC, a refundable tax credit that goes to families and individuals, primarily workers with children, who have income from paid work. The Massachusetts EITC partially matches the EITC at the federal level which “keeps administrative costs and complexity to a minimum, while rewarding and encouraging work.” MassBudget found that increases in EITC payments are associated with:
• Reduction in occurrences of low birthweight
• Increased gestation time for pregnant women
• Increased educational attainment for children – which is linked to better health outcomes
• Improvements in children’s behavioral index scores which measure behaviors such as peer conflict, anxiousness and depression
• Avoidance of the early onset of disabilities and other illnesses associated with low family income
• Increased in the self-reported health of mothers and improved blood pressure, heart rate, cholesterol and inflammation levels for these mothers
• Increased prenatal care
• Increased spending on healthy foods such as fruits and vegetables
• Increased economic activity in neighborhoods with a high concentration of households receiving the credit
A policy that allows workers to take paid time off from work to care for themselves, a new child, or a family member with a serious illness or injury, PFML influences the ability of individuals and families to live healthy lives. The MassBudget report shows that access to PFML can have both short-term and longer term health benefits across the lifespan, including:
• A decline in infant mortality
• Increased rate and duration of breastfeeding
• Improved physical, cognitive and behavioral outcomes for children – including higher rates of vaccination
• Decreased likelihood of behavioral and adjustment problems for adolescents and adults
• Faster recovery from both inpatient and outpatient procedures for children
• Fewer depressive symptoms for new mothers in the short-term and the long-term
• Reduced nursing home utilization by elders
Tackling the complexities of social determinants of health is essential to realizing our vision of a Massachusetts in which everyone has the equitable, affordable, and comprehensive care they need to be healthy. While we must always stand firm in protecting and expanding coverage and care, we must also identify and champion policy solutions that extend beyond this classic framework to address the multitude of factors that so powerfully affect the health of the Commonwealth.