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Effects of the expanded Child Tax Credit on employment outcomes

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  • Ananat, Elizabeth
  • Glasner, Benjamin
  • Hamilton, Christal
  • Parolin, Zachary
  • Pignatti, Clemente

Abstract

The temporary 2021 expansion of the Child Tax Credit (CTC) was intended to reduce child poverty during the COVID-19 pandemic. The expansion’s elimination of an existing phase-in with earnings, however, potentially disincentivized labor supply, raising concerns that it would reduce parent employment. We empirically test for employment effects using difference-in-differences analyses with Current Population Survey data. Across many specifications and multiple sub-groups, we find very small, inconsistently signed, statistically insignificant impacts of the 2021 CTC on parental labor force participation and employment.

Suggested Citation

  • Ananat, Elizabeth & Glasner, Benjamin & Hamilton, Christal & Parolin, Zachary & Pignatti, Clemente, 2024. "Effects of the expanded Child Tax Credit on employment outcomes," Journal of Public Economics, Elsevier, vol. 238(C).
    • Handle: RePEc:eee:pubeco:v:238:y:2024:i:c:s004727272400104x
    DOI: 10.1016/j.jpubeco.2024.105168
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    More about this item

    Keywords

    Child Tax Credit; Employment; Labor supply elasticity;
    All these keywords.

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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