The Earned Income Tax Credit (EITC) has evolved into the largest anti-poverty program in the United States by providing tax credits for low and moderate income working families. In this paper, we describe the characteristics of EITC recipients at various ages using Current Population Survey...

Recent evidence suggests that households' access to credit has improved. If households can vary labor supply in response to stochastic productivity shocks, changes in credit markets can be expected to alter not only savings and borrowing behavior, but also labor effort. The purpose of this...

Limited personal liability for debts has long been justified as a tool to promote entrepreneurial risk taking by providing insurance to the borrower in the event of low returns. Nonetheless, such limits erode repayment incentives, and so may increase unsecured borrowing costs. Our paper is the...

In this article, we address two questions. First, how will a move to pure consumption taxation matter for aggregate outcomes? Second, how regressive are consumption taxes? We find as follows. First, a move to a consumption tax will increase savings taken into retirement but will not alter either...

In this article, we study the long-run implications of a switch from current U.S. tax policy, which features taxes on labor income, capital income, and consumption, to several alternative systems. These alternatives are revenue-neutral switches to 1) a national sales tax on consumption alone, 2)...

This article takes a first step in evaluating a commonly used assumption in recent quantitative analyses of unsecured household borrowing -- the temporary exclusion of defaulting borrowers from credit markets. Exclusion from credit markets is an attractive modeling device for tractably modeling...

A comparison of models and results from selected papers on personal bankruptcy establishes how particular modeling assumptions matter for the implications of bankruptcy. For example, it can be argued that only under income processes that allow for large shocks to net worth can bankruptcy play a...

Many believe that bankruptcy was more painful in the past than now and that the stigma associated with bankruptcy has declined. But a model in which bankruptcy affects both demand and supply in the unsecured credit market suggests otherwise. The model shows that a decrease in stigma, while...

As an implicit form of insurance, bankruptcy may augment, substitute for, or limit other forms of insurance. Conversely, the presence of other forms of insurance may enhance or limit the usefulness of bankruptcy. An investigation of the interaction between one of the largest social insurance...

The 1990's witnessed a historically unprecedented number of personal bankruptcy filings. In response, congressional debate over bankruptcy law has recently led to several proposals aimed at making it more difficult to exempt wealth in bankruptcy. In this paper, I evaluate uniform exemption...