Does the EITC Buffer against Neighborhood Transition? Evidence from Washington, DC

Abstract

Gentrification in major cities has led to concerns that poor and nonwhite residents are being displaced. This paper uses administrative data on tax filing households in Washington DC to examine the potential role that increases in the Earned Income Tax Credit (EITC) plays in the location choices of the working poor. Its principal findings suggest small effects of the EITC on move decisions. Married households with dependents who received increased EITC payments are slightly more likely to remain in gentrifying neighborhoods. By contrast, single parent filers receiving EITC payments are more likely to exit these neighborhoods.