“We find clear evidence that the E.I.T.C. has significantly reduced poverty rates and income inequality,” said Raj Chetty, an economist at Harvard who has studied the subsidy’s effect across cities. “The program is pulling up the lower end of the income distribution.”
The credit also seems to have an important psychological side effect: It makes people feel middle class.
“You get this feeling of, ‘Hey, I’m like them now,’ “ said Wesley Rouse, 27, a property manager in Durham.