Tax Refund Uncertainty: Evidence and Welfare Implicationst

• 成果类型: Article
• 署名作者: Caldwell, Sydnee; Nelson, Scott; Waldinger, Daniel; Kuziemko, Ilyana
• 署名单位: University of California System; University of California Berkeley; University of California System; University of California Berkeley; University of Chicago; New York University
• 刊物名称: AMERICAN ECONOMIC JOURNAL-APPLIED ECONOMICS
• ISSN/ISSBN: 1945-7782
• DOI: 10.1257/app.20210383
• 发表日期: 2023
• 页码: 352-376
• 关键词: plan choice; consumption; INFORMATION; EITC; expectations; debt; constraints; preferences; insurance; KNOWLEDGE

摘要

Transfers paid through annual tax refunds are a large but uncer-tain source of income for poor households. We document that low-income tax filers have substantial subjective uncertainty about these refunds. We investigate the determinants and consequences of refund uncertainty by linking survey, tax, and credit bureau data. On average, filers' expectations track realized refunds. More uncer-tain filers have larger differences between expected and realized refunds. Filers borrow in anticipation of their refunds, but more uncertain filers borrow less, consistent with precautionary behav-ior. A simple consumption-savings model suggests that refund uncer-tainty reduces the welfare benefits of the EITC by about 10 percent. (JEL D81, D83, D84, G51, H24)