Child Tax Credit Has a Critical Role in Helping Families Maintain Economic Stability
End Notes
[1] Arloc Sherman et al., Widespread Economic Insecurity Pre-Pandemic Shows Need for Strong Recovery Package. CBPP, July 14, 2021, https://www.cbpp.org/research/poverty-and-inequality/widespread-economic-insecurity-pre-pandemic-shows-need-for-strong.
[2] Arloc Sherman et al., “Recovery Proposals Adopt Proven Approaches to Reducing Poverty, Increasing Social Mobility,” CBPP, August 5, 2021, https://www.cbpp.org/research/poverty-and-inequality/recovery-proposals-adopt-proven-approaches-to-reducing-poverty.
[3] M.R. Rank, L.M. Eppard, and H.E. Bullock, Poorly Understood: What America Gets Wrong about Poverty, Oxford University Press, 2021; J. LaBriola, D. Schneider, “Worker Power and Class Polarization in Intra-Year Work Hour Volatility,” Social Forces, Vol. 98, No. 3, 2020, pp. 973-999.
[4] J.P. Ziliak, B. Hardy, and C. Bollinger, “Earnings volatility in America: Evidence from matched CPS,” Labour Economics, Vol. 18, No. 6, 2011, pp. 742-754.
[5] J.A. Williams, T.D. Logan, and B.L. Hardy, “The persistence of historical racial violence and political suppression: Implications for contemporary regional inequality,” ANNALS of the American Academy of Political and Social Science, Vol. 694, No. 1, 2021, pp. 92-107.
[6] J. Hacker, “The Great Risk Shift,” in Inequality in the 21st Century, Routledge, 2018, pp. 260-261. B. Hardy, “Income Instability and the Response of the Safety Net,” Contemporary Economic Policy, Vol. 35, No. 2., May 6, 2020, pp. 2312-330.
[7] CBPP, “Policy Basics: Temporary Assistance for Needy Families,” updated March 1, 2022, https://www.cbpp.org/research/family-income-support/temporary-assistance-for-needy-families.
[8] K. Edwards and B. Hardy, “Cash Remains King,” in The Future of Building Wealth: Brief Essays on the Best Ideas to Build Wealth — for Everyone, Ray Boshara and Ida Rademacher, eds, 2021, https://www.aspeninstitute.org/wp-content/uploads/2021/10/the-future-of-building-wealth.pdf.
[9] B. Hardy, T. Smeeding, and J.P. Ziliak, “The changing safety net for low-income parents and their children: Structural or cyclical changes in income support policy?” Demography, Vol. 55, No. 1, 2018, pp. 189-221.
[10] The families studied were also U.S. citizens.
[11] Lucie Schmidt, Lara Shore-Sheppard, and Tara Watson, “Safety Net Program Interactions and Impacts on Low-Income Families,” Reporter, No. 4, December 2021, https://www.nber.org/reporter/2021number4/safety-net-program-interactions-and-impacts-low-income-families.
[12] Zachary Parolin, Sophie Collyer, and Megan A. Curran, “Sixth Child Tax Credit Payment Kept 3.7 Million Children Out of Poverty in December: Child poverty set to spike in January 2022 after expiration of monthly payments,” Columbia University Poverty and Social Brief, Vol. 6, No. 1, January 18, 2022, https://static1.squarespace.com/static/610831a16c95260dbd68934a/t/61ea09926280d03df62aa31d/1642727841927/Monthly-poverty-December-2021-CPSP.pdf. Treasury Department, “By State: Advance Child Tax Credit PaymentsDistributed in December 2021,” December 15, 2021, https://home.treasury.gov/system/files/131/Advance-CTC-Payments-Disbursed-December-2021-by-State-12152021.pdf. Note that monthly and annual poverty-reduction calculations differ. The estimated monthly poverty impact of the expanded Child Tax Credit, for instance, does not include the lump-sum payments received at tax time, so monthly poverty reductions understate the eventual full-year effect of the credit.
[13] National Academies of Sciences, Engineering, and Medicine, “Ten Policy and Program Approaches to Reducing Child Poverty,” A Roadmap to Reducing Child Poverty, The National Academies Press, 2019.
[14] Sherman et al., August 2021.
[15] Center on Poverty and Social Policy at Columbia University, “What we know from the first 6 months of the expanded Child Tax Credit,” December 23, 2021, https://www.povertycenter.columbia.edu/news-internal/2021/child-tax-credit-research-roundup.
[16] Claire Zippel and Arloc Sherman, "Bolstering Family Income Is Essential to Helping Children Emerge Successfully From the Current Crisis," CBPP, updated February 25, 2021, https://www.cbpp.org/research/poverty-and-inequality/bolstering-family-income-is-essential-to-helping-children-emerge.
[17] Claire Zippel and Arloc Sherman, “Policy Brief: Bolstering Family Income Essential to Help Children Emerge From Current Crisis,” CBPP, updated February 25, 2021, https://www.cbpp.org/research/poverty-and-inequality/bolstering-family-income-essential-to-help-children-emerge-from.
[18] R.D. Conger et al., “Economic stress, coercive family process, and developmental problems of adolescents,” Child Development, Vol. 65, No. 2, 1994, pp. 541-561; B. Hardy, H.D. Hill, and J. Romich, “Strengthening social programs to promote economic stability during childhood,” Social Policy Report, Vol. 32, No. 2, 2019, pp. 1-36.
[19] Carrie Masten, Joan Lombardi, and Philip Fisher, “Helping Families Meet Basic Needs Enables Parents to Promote Children’s Healthy Growth, Development,” CBPP and Rapid-EC, October 28, 2021, https://www.cbpp.org/research/poverty-and-inequality/helping-families-meet-basic-needs-enables-parents-to-promote.
[20] S. Cheng et al., “Precarious childhoods: Childhood family income volatility and mental health in early adulthood,” Social Forces, Vol. 99, No. 2, 2020, pp. 672-699; Hardy, Hill, and Romich; L.A. Gennetian et al., “Intrayear household income dynamics and adolescent school behavior,” Demography, Vol. 52, 2015, pp. 455-483; B.L. Hardy, “Childhood income volatility and adult outcomes,” Demography, Vol. 51, 2014, pp. 1641-1665; D. Schneider and K. Harknett, “Consequences of routine work-schedule instability for worker health and well-being,” American Sociological Review, Vol. 84, No. 1, 2019, pp. 82-114; Zippel and Sherman.
[21] J. Rothstein and N. Wozny, “Permanent income and the black-white test score gap,” Journal of Human Resources, Vol. 48, No. 3, 2013, pp. 510-544.; G.B. Dahl and L. Lochner, “The impact of family income on child achievement: Evidence from the earned income tax credit,” American Economic Review, Vol. 102, No. 5, 2012, pp. 1927-56; H. Hoynes, D.W. Schanzenbach, and D. Almond, “Long-run impacts of childhood access to the safety net,” American Economic Review, Vol. 106, No. 4, 2016, pp. 903-34; Hardy, Hill, and Romich; R. Akee et al., “How does household income affect child personality traits and behaviors?” American Economic Review, Vol. 108, No. 3, 2018, pp. 775-827.
[22] I. Garfinkel et al., “The Costs and Benefits of a Child Allowance,” Columbia University Poverty and Social Policy Brief, Vol. 5, No. 1, February 23, 2021, https://static1.squarespace.com/static/610831a16c95260dbd68934a/t/6115326382b0453ebdf59d26/1628779108059/Child-Allowance-CBA-brief-CPSP-2021.pdf.
[23] A. Nichols and J. Rothstein, The Earned Income Tax Credit, University of Chicago Press, pp. 137-218; H. Hoynes, “The earned income tax credit,” ANNALS of the American Academy of Political and Social Science, Vol. 686, No. 1, 2019, pp. 180-203.
[24] Akansha Batra, Deborah Karasek, and Rita Hamad, “Racial Differences in the Association between the U.S. Earned Income Tax Credit and Birthweight,” Women’s Health Issues, Vol 32, Issue 1, 2021.
[25] Suzanne Macartney and Robin Ghertner, “Federal Economic Stimulus Projected to Cut Poverty in 2021, Though Poverty May Rise as Benefits Expire,” Health and Human Services Department, Office of the Assistant Secretary for Planning and Evaluation, February 2022, https://aspe.hhs.gov/sites/default/files/documents/452493535752b7b9e60f7406d6a40a7b/poverty-projections-2021-2022-rb.pdf.
[26] Chuck Marr, Kris Cox, and Arloc Sherman, “Build Back Better’s Child Tax Credit Changes Would Protect Millions From Poverty — Permanently,” CBPP, November 11, 2021, https://www.cbpp.org/research/federal-tax/build-back-betters-child-tax-credit-changes-would-protect-millions-from.
[27] Center on Poverty and Social Policy at Columbia University, “November Child Tax Credit payment kept 3.8 million children from poverty,” December 15, 2021, www.povertycenter.columbia.edu/news-internal/monthly-poverty-november-2021.
[28] Marr, Cox, and Sherman.
[29] G. Acs and K. Werner, “Expanding the Child Tax Credit Could Lift Millions of Children out of Poverty,” Urban Institute, 2021, https://www.urban.org/research/publication/expanding-child-tax-credit-could-lift-millions-children-out-poverty. Sophie Colyer, “Children Losing Out: The Geographic Distribution of the Federal Child Tax Credit,” Columbia University Poverty and Social Policy Brief, Vol. 3, No. 9, December 16, 2019, https://www.povertycenter.columbia.edu/s/Losing-Out-on-Child-Tax-Credit-CPSP-2019.pdf.
[30] Hardy, Smeeding, and Ziliak.
[31] T.A. Loveless, “Supplemental Nutrition Assistance Program (SNAP) Receipt for Households: 2018,” U.S. Census Bureau, June 2020, https://www.census.gov/content/dam/Census/library/publications/2020/demo/acsbr20-01.pdf.
[32] Damon Jones and Ioana Marinescu, “The Labor Market Impacts of Universal and Permanent Cash Transfers: Evidence from the Alaska Permanent Fund,” National Bureau of Economic Research Working Paper 24312, January 2020, https://www.nber.org/papers/w24312.
[33] L. Jones, K. Milligan, and M. Stabile, “Child Cash Benefits and Family Expenditures: Evidence from the National Child Benefit,” Canadian Journal of Economics, Vol 52(4), 2019, pp. 1433-1463.
[34] K. Milligan and M. Stabile, “Child Benefits, Maternal Employment, and Children's Health: Evidence from Canadian Child Benefit Expansions,” American Economic Review Papers and Proceedings, Vol. 99, No. 2, 2011, pp. 128-132.
[35] E. Ananat et al, “Effects of the Expanded Child Tax Credit on Employment Outcomes: Evidence from Real-World Data from April to December 2021,” March 2022, https://www.nber.org/papers/w29823; Stephen Roll, Leah Hamilton, and Yung Chun,“Expanded Child Tax Credit payments have not reduced employment,” Social Policy Institute, January 2022, https://socialpolicyinstitute.wustl.edu/child-tax-credit-payments-not-reduced-employment/; Jacob Goldin, Elaine Maag, and Katherine Michelmore, “Estimating the Net Fiscal Cost of a Child Tax Credit Expansion,” National Bureau of Economic Research Working Paper 29342, February 2022, https://www.nber.org/papers/w29342.
[36] K. Corinth et al., “The Anti-Poverty, Targeting, and Labor Supply Effects of the Proposed Child Tax Credit Expansion,” University of Chicago, Becker Friedman Institute for Economics, Working Paper No. 2021-115, (2021).
[37] Jacob Bastian, “Investigating the Effects of the 2021 Child Tax Credit Expansion on Poverty and Employment,” Working Paper, February 14, 2022, https://drive.google.com/file/d/1H5iNZZO_YFRIDz-3Tip4C-BpnD85bUjH/view.
[38] Ibid.
[39] Richard Kazis and Frieda Molina, “Implementing the WorkAdvance Model,” mdrc, October 2016, https://www.mdrc.org/publication/implementing-workadvance-model.
[40] Ali Safawi and LaDonna Pavetti, “Most Parents Leaving TANF Work, But in Low-Paying, Unstable Jobs, Recent Studies Find,” CBPP, November 19, 2020, https://www.cbpp.org/research/family-income-support/most-parents-leaving-tanf-work-but-in-low-paying-unstable-jobs.
[41] W.A. Darity, Jr. and A.K. Mullen, From Here to Equality: Reparations for Black Americans in the Twenty-First Century. UNC Press Books, 2020; Chye-Ching Huang and Roderick Taylor, “How the Federal Tax Code Can Better Advance Racial Equity,” CBPP, July 25, 2019, https://www.cbpp.org/research/federal-tax/how-the-federal-tax-code-can-better-advance-racial-equity; Williams, Logan, and Hardy; M. Bertrand and S. Mullainathan, “Are Emily and Greg more employable than Lakisha and Jamal? A field experiment on labor market discrimination,” American Economic Review, Vol. 94, No. 4, 2004, pp. 991-1013.
[42] B. Hardy, C. Hokayem, and J.P. Ziliak, “Income Inequality, Race, and the EITC,” National Tax Journal, Vol. 75, No. 1, March 2022.
[43] Chad Stone, “Robust Unemployment Insurance, Other Relief Needed to Mitigate Racial and Ethnic Unemployment Disparities,” CBPP, August 5, 2020, https://www.cbpp.org/research/economy/robust-unemployment-insurance-other-relief-needed-to-mitigate-racial-and-ethnic.
[44] The EITC was introduced in 1975 and expanded in generosity and reach through the tax acts of 1986, 1990, 1993, and 2009. And while initially available only at the federal level, over half of states have now enacted refundable supplements to the federal credit, meaning a state credit is fully available to families even if it exceeds what they owe at tax time.
[45] Y. Ben-Shalom, R.A. Moffitt, and J.K. Scholz, “An Assessment of the Effectiveness of Anti-Poverty Programs in the United States,” National Bureau of Economic Research Working Paper 17042, revised December 2011; Hardy, Smeeding, and Ziliak; H.L. Shaefer, K. Edin, and E. Talbert, “Understanding the dynamics of $2-a-day poverty in the United States,” RSF: The Russell Sage Foundation Journal of the Social Sciences, Vol. 1, No. 1, pp. 120-138; R.A. Moffitt and J.P. Ziliak, “Entitlements: options for reforming the social safety net in the United States,” ANNALS of the American Academy of Political and Social Science, Vol. 686, No. 1, 2019, pp. 8-35.
[46] Hardy, Hokayem, and Ziliak.
[47] K. Edin, L. Tach, and S. Halpern‐Meekin, “Tax code knowledge and behavioral responses among EITC recipients: Policy insights from qualitative data,” Journal of Policy Analysis and Management, Vol. 33, No. 2, pp. 413-439.
[48] Nathan Anderson, “Advance Child Tax Credit Payments: Increasing Support for Families with Children,” Federal Reserve Bank of Chicago, July 14, 2021, https://www.chicagofed.org/publications/blogs/cdps/2021/advance-child-tax-credit-payments.
[49] Marr, Cox, and Sherman.
[50] The Potential Poverty Reduction Effect of the American Families Plan, Center on Poverty and Social Policy, Columbia University, April 28, 2021.
[51] CBPP and National Diaper Bank Network, “End Diaper Need and Period Poverty: Families Need Cash Assistance to Meet Basic Needs,” September 27, 2021, https://www.cbpp.org/research/family-income-support/end-diaper-need-and-period-poverty-families-need-cash-assistance-to.
[52] James P. Ziliak, “Modernizing SNAP Benefits,” Hamilton Project, May 2016, https://www.hamiltonproject.org/assets/files/ziliak_modernizing_snap_benefits.pdf.
[53] U.S. Department of Agriculture, “USDA Modernizes the Thrifty Food Plan, Updates SNAP Benefits,” August 16, 2021, https://www.usda.gov/media/press-releases/2021/08/16/usda-modernizes-thrifty-food-plan-updates-snap-benefits.
[54] Joseph Llobrera, “Modernizing SNAP Benefits Will Help Millions of Families Afford Healthy, Nutritious Diet,” CBPP, August 16, 2021, https://www.cbpp.org/blog/modernizing-snap-benefits-will-help-millions-of-families-afford-healthy-nutritious-diet.
[55] B.L. Hardy, R. Samudra, and J.A. Davis, “Cash Assistance in America: The Role of Race, Politics, and Poverty,” Review of Black Political Economy, Vol. 46, No. 4, 2019, pp. 306-324; Z. Parolin, “Temporary Assistance for Needy Families and the Black–White Child Poverty Gap in the United States,” Socio-Economic Review, 2019.
[56] Darity and Mullen; W. Darity, Jr., F.R. Addo, and I.Z. Smith, “A subaltern middle class: The case of the missing ‘Black bourgeoisie’ in America,” Contemporary Economic Policy, Vol. 39, No. 3, 2021, pp. 494-502.
[57] J. Morduch, and R. Schneider, R. (2017). The Financial Diaries: How American Families Cope in a World of Uncertainty, Princeton University Press, 2017.
[58] Sherman et al., August 2021.