Urban and rural differences in use of earned income credits: A study of Minnesota's working family credit

This article examines receipt rates of Minnesota's earned income credit program by households on welfare from 1992 through 1999. We examine urban and rural differences in the rate of receipt throughout time and in the factors contributing to receipt. Our tabulations show that the central counties of the Minneapolis-St. Paul standard metropolitan statistical area (SMSA) have the lowest receipt rates, although rates are increasing for all regions and the disparities are diminishing through time. We find that a number of policy variables, household characteristics, and local labor market variables differentially affect receipt probabilities. Information from this research might help policy makers and designers of low-income programs construct improved policies that help families more quickly exit poverty.