Abstract

Using the Social Connectedness Index (Bailey et al., 2018b) to capture county-to-county Facebook linkages, I explore how county-level Earned Income Tax Credit (EITC) claiming behavior changes when the county's out-of-state social network is exposed to a newly implemented state EITC. Having more out-of-state friends face a state EITC shifts the composition of EITC claims toward more self-employment claiming. EITC claiming households' income distribution also shifts, moving away from the EITC region with smaller credits, towards income levels that generate the largest EITC. This mimics the direct impacts of state-level EITC policies, consistent with social networks increasing information or salience about EITC policy.

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