The Impact of Labor Income Reward Plan: EITC Experiment Series in China

Abstract

China currently has no in-work benefit nor social welfare programs such as the Earned Income Tax Credits (EITC) in the United States. Yet, the literature and global evidence have suggested EITC-type programs' potentials on poverty alleviation and work incentives. This dissertation examines the first-ever EITC field experiment series in China with a variety of interventions and rigorous validation procedures. The experiment series shows that the participation of the program increases employment and working hours. It also finds significant increases in household earnings and expenditures. These effects are substantially larger than the existing literature partially because of the strong treatment intensity. This dissertation contributes to a large literature that studies the effect of in-work benefits.