IDEAS home Printed from https://ideas.repec.org/a/eee/pubeco/v238y2024ics004727272400104x.html
   My bibliography  Save this article

Effects of the expanded Child Tax Credit on employment outcomes

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S004727272400104X
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.jpubeco.2024.105168?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Zachary Parolin & Giulia Giupponi & Emma K. Lee & Sophie Collyer, 2024. "Consumption responses to an unconditional child allowance in the United States," Nature Human Behaviour, Nature, vol. 8(4), pages 657-667, April.
    2. Alberto Abadie & Susan Athey & Guido W Imbens & Jeffrey M Wooldridge, 2023. "When Should You Adjust Standard Errors for Clustering?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 138(1), pages 1-35.
    3. Raj Chetty & John N. Friedman & Emmanuel Saez, 2013. "Using Differences in Knowledge across Neighborhoods to Uncover the Impacts of the EITC on Earnings," American Economic Review, American Economic Association, vol. 103(7), pages 2683-2721, December.
    4. Collyer, Sophie & Gandhi, Jill & Garfinkel, Irwin & Ross, Schuyler & Waldfogel, Jane & Wimer, Christopher, 2022. "The Effects of the 2021 Monthly Child Tax Credit on Child and Family Well-being: Evidence from New York City," SocArXiv rnmfv, Center for Open Science.
    5. Fisher, Jonathan D. & Johnson, David S. & Smeeding, Timothy M. & Thompson, Jeffrey P., 2020. "Estimating the marginal propensity to consume using the distributions of income, consumption, and wealth," Journal of Macroeconomics, Elsevier, vol. 65(C).
    6. Zachary Parolin & Sophie Collyer & Megan Curran & Christoper Wimer, 2021. "Monthly Poverty Rates among Children after the Expansion of the Child Tax Credit," Poverty and Social Policy Brief 20412, Center on Poverty and Social Policy, Columbia University.
    7. Ward, Jason M. & Anne Edwards, Kathryn, 2021. "CPS Nonresponse During the COVID-19 Pandemic: Explanations, Extent, and Effects," Labour Economics, Elsevier, vol. 72(C).
    8. Callaway, Brantly & Sant’Anna, Pedro H.C., 2021. "Difference-in-Differences with multiple time periods," Journal of Econometrics, Elsevier, vol. 225(2), pages 200-230.
    9. Jeehoon Han & Bruce D. Meyer & James X. Sullivan, 2022. "Real-Time Poverty, Material Well-Being, and the Child Tax Credit," National Tax Journal, University of Chicago Press, vol. 75(4), pages 817-846.
    10. Bruce D. Meyer & Wallace K. C. Mok & James X. Sullivan, 2015. "Household Surveys in Crisis," Journal of Economic Perspectives, American Economic Association, vol. 29(4), pages 199-226, Fall.
    11. Jacob Goldin & Elaine Maag & Katherine Michelmore, 2021. "Estimating the Net Fiscal Cost of a Child Tax Credit Expansion," NBER Working Papers 29342, National Bureau of Economic Research, Inc.
    12. Peter Ganong & Fiona E. Greig & Pascal J. Noel & Daniel M. Sullivan & Joseph S. Vavra, 2022. "Spending and Job-Finding Impacts of Expanded Unemployment Benefits: Evidence from Administrative Micro Data," NBER Working Papers 30315, National Bureau of Economic Research, Inc.
    13. Jacob Goldin & Elaine Maag & Katherine Michelmore, 2021. "Estimating the Net Fiscal Cost of a Child Tax Credit Expansion," NBER Chapters, in: Tax Policy and the Economy, Volume 36, pages 159-195, National Bureau of Economic Research, Inc.
    14. Valerie C. Bradley & Shiro Kuriwaki & Michael Isakov & Dino Sejdinovic & Xiao-Li Meng & Seth Flaxman, 2021. "Unrepresentative big surveys significantly overestimated US vaccine uptake," Nature, Nature, vol. 600(7890), pages 695-700, December.
    15. Zachary Parolin & Elizabeth Ananat & Sophie Collyer & Megan Curran & Christoper Wimer, 2021. "The Initial Effects of the Expanded Child Tax Credit on Material Hardship," Poverty and Social Policy Brief 20413, Center on Poverty and Social Policy, Columbia University.
    16. Jessica Pac & Lawrence M. Berger, 2024. "Quasi‐experimental evidence on the employment effects of the 2021 fully refundable monthly child tax credit," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 43(1), pages 192-213, January.
    17. Brandon Enriquez & Damon Jones & Ernie Tedeschi, 2023. "The Short-Term Labor Supply Response to the Expanded Child Tax Credit," AEA Papers and Proceedings, American Economic Association, vol. 113, pages 401-405, May.
    18. Brandon Enriquez & Damon Jones & Ernest V. Tedeschi, 2023. "The Short-Term Labor Supply Response to the Expanded Child Tax Credit," NBER Working Papers 31110, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Elizabeth Ananat & Benjamin Glasner & Christal Hamilton & Zachary Parolin, 2021. "Effects of the Expanded Child Tax Credit on Employment Outcomes: Evidence from Real-World Data," Poverty and Social Policy Brief 20414, Center on Poverty and Social Policy, Columbia University.
    2. Jessica Pac & Lawrence M. Berger, 2024. "Quasi‐experimental evidence on the employment effects of the 2021 fully refundable monthly child tax credit," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 43(1), pages 192-213, January.
    3. Luis Alvarez & Bruno Ferman, 2020. "Inference in Difference-in-Differences with Few Treated Units and Spatial Correlation," Papers 2006.16997, arXiv.org, revised Apr 2023.
    4. Bradley Hardy & Timothy Smeeding & James P. Ziliak, 2018. "The Changing Safety Net for Low-Income Parents and Their Children: Structural or Cyclical Changes in Income Support Policy?," Demography, Springer;Population Association of America (PAA), vol. 55(1), pages 189-221, February.
    5. Ashesh Rambachan & Jonathan Roth, 2020. "Design-Based Uncertainty for Quasi-Experiments," Papers 2008.00602, arXiv.org, revised Oct 2024.
    6. Bilicka, Katarzyna & Scur, Daniela, 2024. "Organizational capacity and profit shifting," Journal of Public Economics, Elsevier, vol. 238(C).
    7. Shusen Qi & Ralph De Haas & Steven Ongena & Stefan Straetmans & Tamas Vadasz, 2024. "Move a little closer? Information sharing and the spatial clustering of bank branches," Review of Finance, European Finance Association, vol. 28(6), pages 1881-1918.
    8. Pierre Cahuc & Stéphane Carcillo & Bérengère Patault & Flavien Moreau, 2024. "Judge Bias in Labor Courts and Firm Performance," Journal of the European Economic Association, European Economic Association, vol. 22(3), pages 1319-1366.
    9. Samuel Nocito & Marcello Sartarelli & Francesco Sobbrio, 2021. "A Beam of Light: Media, Tourism & Economic Development," CESifo Working Paper Series 9055, CESifo.
    10. Nocito, Samuel & Sartarelli, Marcello & Sobbrio, Francesco, 2023. "A beam of light: Media, tourism and economic development," Journal of Urban Economics, Elsevier, vol. 137(C).
    11. Shibashish Mukherjee & Sorin M.S. Krammer, 2024. "When the going gets tough : Board gender diversity in the wake of a major crisis," Post-Print hal-04522722, HAL.
    12. Goeyvaerts, Geert, 2023. "Reconstructing cities: Stimulating redevelopment through the tax code," Regional Science and Urban Economics, Elsevier, vol. 99(C).
    13. Costi, Chiara & Hollingsworth, Bruce & O'Sullivan, Vincent & Zucchelli, Eugenio, 2023. "Does caring for others affect our mental health? Evidence from the COVID-19 pandemic," Social Science & Medicine, Elsevier, vol. 321(C).
    14. Timpe, Brenden, 2022. "The Labor Market Impacts of America's First Paid Maternity Leave," SocArXiv 7qynt, Center for Open Science.
    15. Schoner, Florian & Mergele, Lukas & Zierow, Larissa, 2024. "Grading student behavior," Labour Economics, Elsevier, vol. 90(C).
    16. Nayga, Jr., Rodolfo M. & Valizadeh, Pourya & Melo, Grace, 2022. "SNAP and well-being of low-income households with children before and during the pandemic," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322184, Agricultural and Applied Economics Association.
    17. Jeehoon Han & Bruce D. Meyer & James X. Sullivan, 2022. "Real-Time Poverty, Material Well-Being, and the Child Tax Credit," National Tax Journal, University of Chicago Press, vol. 75(4), pages 817-846.
    18. MacKinnon, James G. & Nielsen, Morten Ørregaard & Webb, Matthew D., 2023. "Cluster-robust inference: A guide to empirical practice," Journal of Econometrics, Elsevier, vol. 232(2), pages 272-299.
    19. Bradley Hardy & Charles Hokayem, 2023. "The Effects of the 2021 Child Tax Credit on Racial and Ethnic Inequalities in Well-Being," The ANNALS of the American Academy of Political and Social Science, , vol. 710(1), pages 157-171, November.
    20. Dodini, Samuel & Larrimore, Jeff & Tranfaglia, Anna, 2024. "Financial repercussions of SNAP work requirements," Journal of Public Economics, Elsevier, vol. 229(C).

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:pubeco:v:238:y:2024:i:c:s004727272400104x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505578 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.