Skip to main content
Report

Responding to the New Geography of Poverty: Metropolitan Trends in the Earned Income Tax Credit

Elizabeth Kneebone and <a href="https://www.brookings.edu/metro/Staff/garre.aspx">Emily Garr</a>

This report assesses the changing geographic distribution of the low-income population compared to recipients of the federal Earned Income Tax Credit (EITC) between 1999 and 2007, focusing on trends in the nation’s 100 largest metro areas. The analysis finds that:

  • Changes in EITC receipt have tracked closely with the growing and shifting geography of working poverty. From 1999 to 2007, major metropolitan suburbs accounted for roughly half of the nation’s net growth in low-income residents (4.8 million) and EITC recipients (2.5 million), outpacing other types of communities. By 2007, these suburbs were home to more than one-third of all low-income Americans and EITC recipients.

  • Between 1999 and 2007, all 69 large metro areas that experienced significant growth rates in their low-income populations saw EITC receipt increase in response. Southern metro areas like Raleigh, Charlotte, and Atlanta that had the greatest increases in low-income population also saw the greatest upticks in EITC receipt as a result.

  • Low-income workers claimed $47.5 billion through the EITC in 2007—a real increase of 25 percent over 1999—with 60 percent of EITC dollars going to residents of the 100 largest metro areas. Suburban filers claimed one-third of all EITC funds and accounted for half the net increase in EITC dollars claimed. In the 10 metro areas experiencing the greatest increases in low-income population, EITC claims increased by almost $1 billion.

In the wake of the first recession of the 2000s and the slow recovery that followed, the number of low-income Americans increased significantly, especially in suburban communities. As that population grew and suburbanized over the decade, the EITC responded effectively both to economic trends—offering critical support to help working families weather downturns in the economic cycle—and to the changing geography of the working poor.

More

Get daily updates from Brookings