Cost Effectiveness of the Earned IncomeTax Credit as a Health Policy Investment

Muennig, Peter A.; Mohit, Babak; Wu, Jinjing; Rosen, Zohn; Jia, Haomiao

Introduction: Lower-income Americans are suffering from declines in income, health, and longevity over time. Income and employment policies have been proposed as a potential nonmedical solution to this problem. Methods: An interrupted time series analysis of state-level incremental supplements to the Earned Income Tax Credit (EITC) program was performed using data from 1993 to 2010 Behavioral Risk Factor Surveillance System surveys and state-level life expectancy. The cost effectiveness of state EITC supplements was estimated using a microsimulation model, which was run in 2015. Results: Supplemental EITC programs increased health-related quality of life and longevity among the poor. The program costs about $7,786/quality-adjusted life-year gained (95% CI¼$4,100, $13,400) for the average recipient. This ratio increases with larger family sizes, costing roughly $14,261 (95% CI¼$8,735, $19,716) for a family of three. Conclusions: State supplements to EITC appear to be highly cost effective, but randomized trials are needed to confirm these findings.


Also Published In

American Journal of Preventive Medicine

More About This Work

Academic Units
Health Policy and Management
Published Here
September 30, 2016