Tax Policy And The Economy, Volume 9 (nber Tax Policy And The Economy)

Send orders and business correspondence to: The MIT Press 55 Hayward Street Cambridge, MA 02142 In the United Kingdom, continental Europe, and the Middle East and Africa, send orders and business correspondence to: The MIT Press Ltd. Fitzroy House, 11 Chenies Street London WC1E 7ET ENGLAND ISSN: 9892-8649 ISBN: hardcover 0-262-16153-2 paperback 0-262-66095-4 Copyright Information Permission to photocopy articles for internal or personal use, or the internal or personal use of specific clients, is granted by the copyright owner for users registered with the Copyright Clearance Center (CCC) Transactional Reporting Service, provided that the fee of $5.00 per copy is paid directly to CCC, 222 Rosewood Drive, Danvers, MA 01923. The fee code for users of the Transactional Reporting Service is: 0892-8649/95 $5.00. For those organizations that have been granted a photocopy license with CCC, a separate system of payment has been arranged. © 1995 by the National Bureau of Economic Research and The Massachusetts Institute of Technology. NATIONAL BUREAU OF ECONOMIC RESEARCH Officers: Paul W. McCracken, Chairman John H. Biggs, Vice Chairman Martin Feldstein, President and Chief Executive Officer Geoffrey Carliner, Executive Director Gerald A. Polansky, Treasurer Sam Parker, Director of Finance and Administration Directors at Large: Peter C. Aldrich Elizabeth E. Bailey John H. Biggs Andrew Brimmer Carl F. Christ Don R. Conlan Kathleen B. Cooper Jean A. Crockett George C. Eads Martin Feldstein George Hatsopoulos Karen N. Horn Lawrence R. Klein Leo Melamed Merton Miller Michael H. Moskow Robert T. Parry Peter G. Peterson Richard N. Rosett Bert Seidman Kathleen P. Utgoff Donald S. Wasserman Marina v. N. Whitman John 0. Wilson Directors by University Appointment: Jagdish Bhagwati, Columbia William C. Brainard, Yale Glen G. Cain, Wisconsin Franklin Fisher, Massachusetts Institute of Technology Saul H. Hymans, Michigan Marjorie B. McElroy, Duke Joel Mokyr, Northwestern James L. Pierce, California, Berkeley Andrew Postlewaite, Pennsylvania Nathan Rosenberg, Stanford Harold T. Shapiro, Princeton Craig Swan, Minnesota Michael Yoshino, Harvard Arnold Zeilner, Chicago Directors by Appointment of Other Organizations: Marcel Boyer, Canadian Economics Charles Lave, American Economic Association Association Mark Drabenstott, American Rudolph A. Oswald, American Agricultural Economics Association Federation of Labor and Congress of Industrial Organizations Richard A. Easterlin, Economic History Association Gail D. Fosler, The Conference Board Gerald A. Polansky, American Statistical Association Institute of Certified Public Accountants James F. Smith, National Association of Business Economists Robert S. Hamada, American Finance Josh S. Weston, Committee for Association Economic Development A. Ronald Gallant, American Directors Emeriti: Moses Abramovitz Emilio G. Collado George T. Conklin, Jr. Thomas D. Flynn Gottfried Haberler Franklin A. Linsay Paul W. McCracken Geoffrey H. Moore James J. O'Leary George B. Roberts Eli Shapiro William S Vickrey Since this volume is a record of conference proceedings, it has been exempted from the rules governing critical review of manuscripts by the Board of Directors of the National Bureau (resolution adopted 8 June 1948, as revised 21 November 1949 and 20 April 1968). CONTENTS Introduction James M. Poterba vii Acknowledgments xi THE EARNED INCOME TAX CREDIT AND TRANSFER PROGRAMS: A STUDY OF LABOR MARKET AND PROGRAM PARTICIPATION 1 Stacy Dickert, Scott Houser, and John Karl Scholz CIGARETTE TAXATION AND THE SOCIAL CONSEQUENCES