Relative to annual payments, more frequent, periodic payments of the EITC indicates that periodic payments reduce perceived financial stress, diminish debt accumulation and late fees, and improve mental health.

"Evidence from the U.S. Earned Income Tax Credit program (EITC) may shed light on frequency’s impact in high-income economies. EITC recipient households often have limited access to liquidity, such that even a short delay in income payments leads to notable changes in spending. Studies of EITC spending find that recipients allocate most of this income to savings, debt repayments, vehicle purchases, transportation, education investment, and housing. Evidence from the Chicago EITC Periodic Payment Pilot indicates that periodic payments reduce perceived financial stress, diminish debt accumulation and late fees, and improve mental health. This indicates that credit and savings constraints exist in developed country contexts as well, and deserve more study."

empirical