The following publications represent the full list of our continuously expanding collection of Child Tax Credit research. The resources featured here track the evidence across our central areas of focus to date: the effects of the 2021 Child Tax Credit expansion; who the Child Tax Credit reaches and who it continues to leave out; anti-poverty estimates of proposed and enacted Child Tax Credit policy changes; benefit-cost analyses of a permanent Child Tax Credit expansion; and how different elements of policy design (e.g. full refundability; adjusting benefit levels of inflation; monthly payment delivery; and more) matter in terms of effecting lasting change for children.
Tracking the Effects of the 2021 Expanded Child Tax
The American Rescue Plan made three important changes to the Child Tax Credit for 2021—higher benefit levels, particularly for young children; expanded access to children in families with the lowest incomes historically left out; and monthly payment delivery —that represented a historic, albeit, temporary policy transformation. This research tracks the effects of this expansion across a range of indicators, including: child poverty; food, financial, and material hardship; family income and expenditures; employment; and more.
This research roundup summarizes the range of publicly available information on what we know of the effects of the expanded credit close to one year on from the last monthly Child Tax Credit payment. The weight of the evidence is clear: while in place, the expanded Child Tax Credit reached the vast majority of families; shored up family finances; helped reduce child poverty to the lowest level on record; decreased food insufficiency; increased families’ ability to meet their basic needs; and had no discernable negative effects on parental employment. Since its expiration, many families with children have seen a reversal of fortune directly attributable to the loss of the credit.
Curran, Megan A. 2022. Research roundup of the expanded Child Tax Credit: One year on. Poverty and Social Policy Report, vol. 6, no. 9. New York: Center on Poverty and Social Policy, Columbia University.
Related: Research roundup of the expanded Child Tax Credit: First six months, December 2021
This academic article discusses the structure of the Child Tax Credit and its effects on childhood poverty and other indicators of well-being during three distinct phases: prior to the 2021 American Rescue Plan (ARP) expansion, during the 2021 expansion, and after the expansion’s expiration. It also examines recent efforts to establish state-level CTCs, showing how states can establish CTCs that reduce child poverty rates by half, either as a complement to an expanded federal CTC or in the absence of a continued federal expansion.
Collyer, Sophie, Megan A. Curran, Irwin Garfinkel, David Harris, Zachary Parolin, Jane Waldfogel, and Christopher. 2023. The Child Tax Credit and family well-being: An overview of reforms and impacts. The ANNALS of the American Academy of Political and Social Science, vol. 706, no. 1.
We found that the first Child Tax Credit payment kept 3 million children from poverty in July 2021; 3.5 million children from poverty in August 2021; 3.4 million children from poverty in September 2021; 3.6 million children from poverty in October 2021; 3.8 million children from poverty in November 2021, and 3.7 million children from poverty in December 2021. However, the expiration of the monthly payments resulted in 3.7 million more children in poverty in January 2022. Since then, monthly poverty in 2022 remained elevated in February, saw a temporary dip in March due to the receipt of the balance of the credit at tax time, but rose back up in April and May and remained high through summer 2022.
Parolin, Zachary, Megan Curran, Jordan Matsudaira, Jane Waldfogel, Christopher Wimer. 2022. Estimating monthly poverty rates in the United States. Journal of Policy Analysis and Management.
Related: Comparing the performance of monthly poverty measures
Related: Center on Poverty and Social Policy Monthly Poverty Data Page (access data & charts)
We provide the first estimates on how the full 2021 Child Tax Credit affected child poverty in each state. Using new data from the American Community Survey Supplemental Poverty Measure (ACS SPM), this fact sheet shows that the expanded Child Tax Credit resulted in child poverty rates falling to less than 10 percent in every state nationwide, except California (10.5%) and the District of Columbia (13.8%) in 2021.
Wilson, Danielle, Sophie Collyer, Bradley Hardy, and Christopher Wimer. 2023. State-level poverty impacts of the Child Tax Credit in 2021. Poverty and Social Policy Fact Sheet. New York: Center on Poverty and Social Policy, Columbia University.
This policy report, released by the The Hamilton Project at The Brookings Institution, investigates state variation in the effects of the 2021 expanded Child Tax Credit on child poverty. It examines differences in these effects by state-level cost of living and by differences in state-level poverty rates. Results show that while the expanded Child Tax Credit resulted in substantial reductions in poverty across the board, poverty reductions were the greatest in those states with relatively lower costs of living and with higher pre-expansion poverty rates.
Hardy, Bradley, Sophie Collyer, Christopher Wimer. 2023. The antipoverty effects of the expanded Child Tax Credit across states: Where were the historic reductions felt? Washington, DC: The Hamilton Project.
In 2021, the expanded Child Tax Credit cut child poverty by 43 percent, driving child poverty to the lowest level on record under the Supplemental Poverty Measure. We find that children in groups historically excluded from the Child Tax Credit —here: Black and Latino children, children in single-parent families, rural families, children in larger families, and families with young children—all saw large declines in child poverty under the expanded credit, in many cases closing gaps between them and groups previously less likely to be left behind. The expanded Child Tax Credit’s supplemental bonus of $600 per young child per year also helped equalize child poverty rates between younger and older children.
Wimer, Christopher, Sophie Collyer, David Harris, Jiwan Lee. 2022. The 2021 Child Tax Credit expansion: Child poverty reduction and the children formerly left behind. Poverty & Social Policy Brief, vol. 6, no. 8. New York: Center on Poverty and Social Policy, Columbia University.
We estimate how the expanded Child Tax Credit would move the United States in its child poverty ranking relative to other wealthy nations. From lowest child poverty rate to highest, the US ranks 31st among 34 OECD nations. An expanded Child Tax Credit moves the United States closer to the mainstream: from 31st to 24th, lowering the US child poverty rate to a point significantly closer to that of other wealthy democracies such as Germany and France.
Collyer, Sophie, Megan A. Curran, David Harris, Dominic Richardson, and Christopher Wimer 2022. A step in the right direction: the expanded Child Tax Credit would move the United States’ high child poverty rate closer to peer nations. Poverty and Social Policy Joint Report, vol. 6, no. 7. New York: Center on Poverty and Social Policy at Columbia University & UNICEF Innocenti–Global Office of Research and Foresight.
We find that the first monthly CTC payments strongly reduced food insufficiency among low-income households with children. The payments are associated with a 7.5-percentage point or, 25 percent, decline in food insufficiency among low-income families. These effects are primarily concentrated among households with annual incomes of less than $35,000.
Parolin, Zachary, Elizabeth Ananat, Sophie Collyer, Megan A. Curran, and Christopher Wimer. 2021. The initial effects of the expanded Child Tax Credit on material hardship. Working Paper. Cambridge, MA: National Bureau of Economic Research.
We investigate the effects of the monthly vs. the lump-sum expanded Child Tax Credit payments on food and housing hardship and find that families were more likely to use the monthly benefits to purchase food (and that monthly payments reduced food hardship), but the lump-sum benefits to catch up on rent payments (and that the lump-sum payment reduced housing hardship).
Parolin, Zachary, Elizabeth Ananat, Sophie Collyer, Megan Curran, and Christopher Wimer. 2022. The differential effects of monthly and lump-sum Child Tax Credit payments on food and housing hardship. Working Paper. New York: Center on Poverty and Social Policy, Columbia University.
National
We investigate the impact of the Child Tax Credit expansion on family consumption patterns using anonymized mobile-location data and debit/credit card data that track visits and spending at 1.3 million establishments across counties that cover 99.6% of the US population. Counties benefiting most from the expansion saw larger increases in child care center visits; spending at personal care establishments, restaurants, and grocery and general stores. There were no significant increases in consumption at alcohol, tobacco, or gambling establishments. Monthly Child Tax Credit payments led to greater consumption at grocery and general stores and lumpsum Child Tax Credit payments saw greater consumption at children’s and family clothing stores. Both monthly and lumpsum payments increased child care center visits. These findings indicate the expanded Child Tax Credit increased household consumption and particularly spending on children.
Parolin, Zachary, Giulia Giupponi, Emma Lee, and Sophie Collyer. 2024. Consumption responses to an unconditional child allowance in the United States. Nature Human Behavior, vol. 08, pp 657-667. OSF Pre-print: 10.31219/osf.io/k2mwy
We use data from the Consumer Expenditure Survey from January 2019 to March 2022 to examine the impact of the expanded Child Tax Credit on household spending. This paper provides a first preliminary look at expenditures using partial data from the first two months of the payments. Families used the monthly payments to enhance the well-being of both their children and the entire household. For each $100 of imputed Child Tax Credit payment, our models show that families spent $75, mainly on food ($28), housing ($31), and child-related goods and services ($15). Low-income households, Hispanic households, and non-Hispanic Black households spent larger proportions of their payments than the average household.
Schild, Jake, Sophie M. Collyer, Thesia Garner, Neeraj Kaushal, Jiwan Lee, Jane Waldfogel, and Christopher Wimer. 2023. Effects of the expanded Child Tax Credit on household spending: Estimates based on U.S. consumer expenditure survey data. Working Paper Series, no. 31412. National Bureau of Economic Research.
New York City
We interviewed 18 families in New York City multiple times over six months to see how they incorporated the monthly Child Tax Credit into their budgets: most used it to cover basic needs (food, housing, and child care), while others paid down credit card debt and saved. Virtually all used it for child-related expenses or enhancements. It proved beneficial to working parents in helping with child care and made a real difference for people living on the margins as they rarely have “extra” money to spend. These gains were temporary, as parents reported increased hardship following the expiration of the monthly Child Tax Credit payments after December 2021.
Lens, Vicki, Abraham Arriaga, Caterina Pisciotta, Lily Bushman-Copp, Kimona Spencer, and Samantha Kronenfeld. 2022. Spotlight on Child Tax Credit: Transforming the lives of families. The Poverty Tracker. New York City: Robin Hood.
We assess the effects of the monthly Child Tax Credit payments in place in 2021 using data from two longitudinal studies of well-being in New York City and find that the monthly Child Tax Credit led to significant declines in the risk for facing material hardship, multiple hardships, running out of money, and using food pantries. We do not find evidence of significant changes in parents’ mental health, employment, or spending on childcare or enrichment activities.
Collyer, Sophie, Jill Gandhi, Irwin Garfinkel, Schuyler Rose, Jane Waldfogel, and Christopher Wimer. 2022. The effects of the 2021 monthly Child Tax Credit on child and family well-being: Evidence from New York City. Socius, vol. 8.
We use the Census Household Pulse Survey to examine the effects of the 2021 Child Tax Credit expansion and its expiration on psychological distress of adults in households with children and its differential effects by gender, education, marital status, and race and ethnicity. Our results indicate that the expanded Child Tax Credit led to a significant reduction in the percentage of having at least mild symptoms of psychological distress in the overall sample, especially among female, single, married, and Hispanic adults; no significant effects were found on the rate of moderate or severe psychological distress symptoms. We find that more adults experienced moderate to severe psychological distress after the monthly CTC payments ended.
Cha, Eunho, Jiwan Lee, and Stacie Tao. 2023. Impact of the expanded Child Tax Credit and its expiration on adult psychological well-being. Social Science & Medicine, Vol. 332, 116101.
We estimate the 2021 Child Tax Credit expansion’s effects on the subjective well-being and mental health of adult recipients, using data from the nationally-representative Understanding America Study. We found no evidence that the Child Tax Credit expansion had a significant short-term impact on measures of life satisfaction, anxiety, and depression symptomatology among adult recipients. We speculate that the null effects may be due to the expansion’s temporary nature.
Glasner, Benjamin, Oscar Jiménez-Solomon, Sophie M. Collyer, Irwin Garfinkel, and Christopher Wimer. 2022. No evidence the Child Tax Credit expansion had an effect on the well-being and mental health of parents. Health Affairs, vol. 41, no. 11.
We empirically assess how the Child Tax Credit monthly payments affected employment outcomes using real-world data from April through December 2021. Our analyses of real-world data suggest that the expanded CTC did not have negative short-term employment effects that offset its documented reductions in poverty and hardship.
Ananat, Elizabeth, Benjamin Glasner, Christal Hamilton, and Zachary Parolin. 2022. Effects of the expanded Child Tax Credit on employment outcomes: Evidence from real-world data from April to December 2021. Working Paper. Cambridge, MA: National Bureau of Economic Research.
Who is Left Out? The Case for Child Tax Credit Reform
From its inception, the Child Tax Credit has excluded a substantial proportion of children from the full credit because their families do not earn enough to qualify. Numbers have changed over time, but prior to the pandemic, 1 out of every 3 children nationwide were left out. Disparities were widespread: 1 out of every 2 Black and Latino children were left out and high proportions of children in single parent households, young children, children in larger families, children in rural areas, and children in higher poverty areas were also excluded. This research identifies patterns and changes among the population of children left out of the full Child Tax Credit through historic and recent policy changes.
This analysis provides updated estimates of the share of children ineligible for the full Child Tax Credit in 2022, overall and income, race/ethnicity, and family type. It reveals that the full Child Tax Credit was kept out of reach of 18 million children in the United States in 2022, representing 26% of all children. Children in groups previously excluded continued to be left out at high rates, including more than 90% of children in poverty.
Collyer, Sophie, Megan Curran, David Harris, and Christopher Wimer. 2023. Children left behind by the Child Tax Credit in 2022. Poverty and Social Policy Brief, vol. 7, no. 4. New York: Center on Poverty and Social Policy, Columbia University.
We provide the first look at the one-third of all children in the US who are ‘left behind’ and excluded from the full Child Tax Credit because their families do not have enough earnings to qualify. This analysis provides statistics on those disproportionately left out, including children of color, those in families with young children, those with single parents, and those who reside in rural areas.
Collyer, Sophie, David Harris, and Christopher Wimer. 2019. Left behind: The one-third of children in families who earn too little to get the full Child Tax Credit. Poverty and Social Policy Brief, vol. 3, no. 6. New York: Center on Poverty and Social Policy, Columbia University.
This academic article discusses the structure of the Child Tax Credit and its effects on childhood poverty and other indicators of well-being during three distinct phases: prior to the 2021 American Rescue Plan (ARP) expansion, during the 2021 expansion, and after the expansion’s expiration. It also examines recent efforts to establish state-level CTCs, showing how states can establish CTCs that reduce child poverty rates by half, either as a complement to an expanded federal CTC or in the absence of a continued federal expansion.
Collyer, Sophie, Megan A. Curran, Irwin Garfinkel, David Harris, Zachary Parolin, Jane Waldfogel, and Christopher Wimer. 2023. The Child Tax Credit and family well-being: An overview of reforms and impacts. The ANNALS of the American Academy of Political and Social Science, vol. 706, no. 1.
This updates our prior analysis from 2019 with information for 2022 and identifies the proportion of children left out of the full Child Tax Credit by state and congressional district. States with the highest levels of children estimated to be ineligible for the full Child Tax Credit in 2022 because their family income was too low are: Mississippi (38.6%), West Virginia (37.2%), Louisiana (36.9%), New Mexico (36.5%), and Arkansas (36.0 %). The congressional districts with the highest levels of children left behind by the Child Tax Credit in 2022 include: NY-15 (54.7%), TX-34 (52.0%), TX-29 (48.9%), KY-5 (48.4%), NY-13 (48.2%), MI-13 (47.9%), MS-2 (47.9%), AL-7 (46.4%), PA-2 (46.4%), CA-40 (45.7%)
Center on Poverty and Social Policy. 2024. Children left behind by the Child Tax Credit in 2022: by state and congressional district.
We identify the proportion of children left out of the full Child Tax Credit by state and congressional district. Children in lower income/higher poverty areas are more likely to be left out. States with the highest levels of children left out include: Mississippi (47%), New Mexico (46%), Louisiana (43%), Arkansas (44%), and Alabama (43%). The Congressional districts with the highest proportion of children left out include: NY-15 (68%), MI-13 (61%), TX-34 (61%), TX-29 (60%), CA-16 (59%), NY-13 (58%), MS-2 (58%), AZ-7 (58%), TX-28 (57%), and CA-40 (57%).
Collyer, Sophie. 2019. Children losing out: The geographic distribution of the federal Child Tax Credit. Poverty and Social Policy Brief, vol. 3, no. 9. New York: Center on Poverty and Social Policy, Columbia University.
We reveal how the structure of the Child Tax Credit, prior to the 2021 temporary expansion, meant that families must earn more money with each additional child in order to maintain access to the full Child Tax Credit. In 2019, for example, a two-adult, two-child family had to earn at least $36,000 to access the full credit for their family, but a two-adult, three-child family had to earn at least $42,000 in order to receive the full credit. This brief also provides a state-by-state list of where children in larger families are left out of the full Child Tax Credit at the greatest rates.
Curran, Megan A. and Sophie Collyer. 2020. Children left behind in larger families: The uneven receipt of the federal Child Tax Credit by children’s family size. Poverty and Social Policy Brief, vol. 4, no. 4. New York: Center on Poverty and Social Policy, Columbia University.
Predicting the Anti-Poverty Potential of an Expanded Child Tax Credit
The 2021 American Rescue Plan expansion of the Child Tax Credit was based largely on the parameters of the American Family Act, a proposal introduced in Congress prior to the onset of the COVID-19 pandemic. Prior to the American Rescue Plan enactment, estimates of the potential anti-poverty impact of this type of expansion found that an expanded Child Tax Credit could cut child poverty at the national level nearly in half, while meaningfully reducing child poverty across states, racial and ethnic groups, family types, and more. Evidence afterwards shows that the expanded Child Tax Credit helped reduce child poverty to a historic low nationwide.
We examine the continued rise in child poverty from 2021 to 2023, as documented by the US Census Bureau, to understand: what would child poverty rates have been if the 2021 temporary expansion of the Child Tax Credit had been in place in 2023? We model an expanded Child Tax Credit – based on the increased credit amounts and expanded eligibility of the 2023 American Family Act expansion – in the 2023 data. Results reveal that on its own, an expanded Child Tax Credit could have kept 5.6 million children from poverty and cut the 2023 SPM child poverty rate by over 47%.
Koutavas, Anastasia, Christopher Yera, Sophie Collyer, Megan Curran, and David Harris. 2024. What could 2023 child poverty rates have looked like had an expanded Child Tax Credit had still been in place? A poverty reduction analysis of the 2023 American Family Act. Poverty and Social Policy Brief, vol. 8, no. 3. New York: Center on Poverty and Social Policy, Columbia University.
We examine the sharp rise in child poverty from 2021 to 2022, as documented by the US Census Bureau, to understand: what would child poverty rates have been if the 2021 temporary expansion of the Child Tax Credit had continued into 2022? We model an expanded Child Tax Credit – based on the increased credit amounts and expanded eligibility of the 2021 expansion – in the 2022 data. Results reveal that on its own, an expanded Child Tax Credit could have kept over 5 million children from poverty and cut the 2022 SPM child poverty rate by 47%.
Koutavas, Anastasia, Christopher Yera, Sophie Collyer, Megan Curran, David Harris, and Christopher Wimer. 2023. What would 2022 child poverty rates have looked like if an expanded Child Tax Credit had still been in place? Poverty and Social Policy Brief, vol. 7, no. 3. New York: Center on Poverty and Social Policy, Columbia University.
This academic article discusses the structure of the Child Tax Credit and its effects on childhood poverty and other indicators of well-being during three distinct phases: prior to the 2021 American Rescue Plan (ARP) expansion, during the 2021 expansion, and after the expansion’s expiration. It also examines recent efforts to establish state-level CTCs, showing how states can establish CTCs that reduce child poverty rates by half, either as a complement to an expanded federal CTC or in the absence of a continued federal expansion.
Collyer, Sophie, Megan A. Curran, Irwin Garfinkel, David Harris, Zachary Parolin, Jane Waldfogel, and Christopher. 2023. The Child Tax Credit and family well-being: An overview of reforms and impacts. The ANNALS of the American Academy of Political and Social Science, vol. 706, no. 1.
This fact sheet examines the poverty reduction potential of the proposed American Family Act, the eventual basis for the 2021 American Rescue Plan expansion. It provides estimates for national reductions in poverty and deep poverty by children's age, race and ethnicity, and family characteristics, as well as state-level results. In a pre-pandemic context, an expanded Child Tax Credit under the parameters of the proposed American Family Act could see child poverty cut nearly in half (a reduction of 45%).
Center on Poverty and Social Policy. 2021. A poverty reduction analysis of the American Family Act H.R. 1560, 116th Congress. Poverty & Social Policy Fact Sheet. New York: Columbia University.
Related: A supplementary table estimating the anti-poverty impacts, by children’s race and ethnicity, of the American Family Act relative to the child poverty rate before and after accounting for the Child Tax Credit under current law.
Our 2019 analysis of the proposed Economic Mobility Act (H.R. 3300, 116th Congress) finds that an expanded Child Tax Credit (expanded eligibility, but no change in benefit levels) and an expanded childless Earned Income Tax Credit could cut child poverty by close to 25 percent.
Wimer, Christopher, Sophie Collyer, David Harris, and Robert Paul Hartley. 2019. The Economic Mobility Act as antipoverty policy: Proposed changes to tax law would cut child poverty nearly a quarter. Poverty and Social Policy Brief, vol. 3, no. 8. New York: Center on Poverty and Social Policy, Columbia University.
Our 2017 analysis of the proposed American Family Act (S. 2018, 115th Congress) finds an expanded Child Tax Credit (increased benefit levels and expanded eligibility) could cut child poverty by close to half.
Christopher Wimer and Sophie Collyer. 2017. Expanding the Child Tax Credit would cut child poverty nearly in half. Poverty and Social Poverty Brief, vol. 1, no. 3. New York: Center on Poverty and Social Policy, Columbia University.
This fact sheet analyzes the potential poverty reduction effects of a set of policy elements in the American Rescue Plan. It projects annual poverty rates for 2021 for the US population as a whole and across age and racial and ethnic groups. A relief package containing enhanced Supplemental Nutrition Assistance Program (SNAP) benefits, unemployment benefits, family and child care tax credits, as well as direct cash payments could cut child poverty by more than half in 2021.
Collyer, Sophie, Megan A. Curran, Robert Paul Hartley, Zachary Parolin and Christopher Wimer. 2021. The potential poverty reduction effect of the American Rescue Plan. Poverty and Social Policy Fact Sheet. New York: Center on Poverty and Social Policy, Columbia University.
This fact sheet analyzes the potential poverty reduction effects of a set of policy elements in President Biden’s proposed American Families Plan. It projects annual poverty rates for 2022, finding that these policies could reduce the national poverty rate by nearly one-quarter (23%) and the child poverty rate by nearly half (47.4%), relative to the projected poverty rates for 2022 without the American Families Plan. This could sustain the progress made towards reducing U.S. poverty projected under the American Rescue Plan beyond 2021.
Collyer, Sophie, Megan A. Curran, Robert Paul Hartley, Zachary Parolin, and Christopher Wimer. 2021. The potential poverty reduction effect of the American Families Plan. Poverty and Social Policy Fact Sheet. New York: Center on Poverty and Social Policy, Columbia University.
This academic article discusses the structure of the Child Tax Credit and its effects on childhood poverty and other indicators of well-being during three distinct phases: prior to the 2021 American Rescue Plan (ARP) expansion, during the 2021 expansion, and after the expansion’s expiration. It also examines recent efforts to establish state-level CTCs, showing how states can establish CTCs that reduce child poverty rates by half, either as a complement to an expanded federal CTC or in the absence of a continued federal expansion.
Collyer, Sophie, Megan A. Curran, Irwin Garfinkel, David Harris, Zachary Parolin, Jane Waldfogel, and Christopher. 2023. The Child Tax Credit and family well-being: An overview of reforms and impacts. The ANNALS of the American Academy of Political and Social Science, vol. 706, no. 1.
In a 50-state joint analysis with the Institute on Taxation and Economic Policy (ITEP), we present state child tax credit options that would reduce state child poverty rates by 25 or 50 percent when coupled with the federal credit, which—after the expiration of the 2021 expansion—provides a maximum of $2,000 per child, is not fully refundable, and phases in with earnings. Heading into 2023, there is increasing momentum for state child tax credits, with ten states already delivering a credit and many others considering one.
Collyer, Sophie, Aidan Davis, David Harris, Megan Curran and Christopher Wimer. 2022. State child tax credits and child poverty: A 50-state analysis. New York and Washington DC: Columbia University Center on Poverty and Social Policy and Institute on Taxation and Economic Policy.
In a 50-state joint analysis with the Institute on Taxation and Economic Policy (ITEP), we find that expanding state-level Child Tax Credits, to complement the federal credit, could lift millions of children out of poverty and help families who benefited little or not at all from the 2017 federal Child Tax Credit expansion. We outline two bold options for creating state-level Child Tax Credits: the first would reduce child poverty by at least 15 percent in all but four states, while the second, more ambitious, option would reduce child poverty by at least 25 percent in all states and up to 45 percent in more than half of states.
Davis, Aidan, Meg Wiehe, Sophie Collyer, David Harris, and Christopher Wimer. 2019. The case for extending state-level child tax credits to those left out: A 50-state analysis. Washington DC and New York: Institute for Taxation and Economic Policy and Center on Poverty and Social Policy.
The Potential Long-Term Benefits of an Expanded Child Tax Credit
Benefit-cost analysis reveals that a permanently expanded Child Tax Credit would deliver an annual value to society ten times the annual cost, a rate of return of approximately $10 in benefits to society for every $1 spent through improvements in children’s health, education, and future earnings.
This is a methodological update to the 2022 Benefits and Costs of a Child Allowance academic article in the Journal of Benefit-Cost Analysis in which we developed a model to calculate the benefits and costs of cash transfers to families with children. This update now shows that a $1,000 increase in household income from cash and near-cash transfer generates $8,342 social benefits, and a child allowance policy with $97 billion of fiscal cost per year, generates social benefits of $1,541 billion per year. As new studies broaden and deepen our understanding, we will continue to update the model periodically.
Garfinkel, Irwin, Elizabeth Ananat, Sophie M. Collyer, Robert Paul Hartley, Buyi Wang, and Christopher Wimer. 2024. Update of the benefits and costs of a child allowance—April 2024. New York: Center on Poverty and Social Policy, Columbia University.
This benefit-cost analysis examines three proposed versions of a child allowance. We find that an expanded Child Tax Credit, similar to that enacted under the 2021 American Rescue Plan, would cost $97 billion per year and generate social benefits of $929 billion per year—producing an annual rate of return nearly 10 times that of the annual cost. Sensitivity analyses indicate the results are robust and that a child allowance produces a very strong to an extraordinarily strong return for the U.S. population.
Garfinkel, Irwin, Sariscsany, Laurel, Ananat, Elizabeth, Collyer, Sophie, Hartley, Robert Paul, Wang, Buyi, & Christopher Wimer. 2022. The benefits and costs of a child allowance. Journal of Benefit-Cost Analysis, pp. 1-28.
Impact of Policy Design: Considerations for Future Reform
Policy design choices affect the anti-poverty potential of the Child Tax Credit. This research identifies how different policy design elements—including, but not limited to: full refundability, monthly payment delivery, indexing the credit to inflation, and more—impact short-term and long-term policy outcomes.
We examine the anti-poverty potential of the expanded Child Tax Credit under different scenarios to shine a spotlight on the importance of inflation indexation for optimizing the anti-poverty effects of policy. We find that: anti-poverty policies that have higher benefit levels achieve a greater degree of poverty reduction; anti-poverty policy benefits that are not indexed to inflation will have their dollar value erode over time; a Child Tax Credit not indexed to inflation would lose about a quarter of its value over ten years; and policymakers should include inflation indexation in all anti-poverty program benefits to ensure their effectiveness.
Collyer, Sophie, Christopher Wimer, and David Harris. 2022. Keeping up with inflation: How policy indexation can enhance poverty reduction. New York: Center on Poverty and Social Policy at Columbia University and The Century Foundation.
We show how monthly benefit delivery has the power to smooth within-year volatility in incomes and reduce child poverty year-round, using the 2021 American Rescue Plan expanded Child Tax Credit and the existing Earned Income Tax Credit as examples. We find that monthly distribution of tax credits can meaningfully reduce child poverty and keep it low year-round. A Child Tax Credit delivered monthly would cut child poverty by about one-third in each month compared to an annual credit and could keep about 1 in 10 children from experiencing poverty at any point during the year.
Hamilton, Christal, Christopher Wimer, Sophie Collyer, and Laurel Sariscsany. 2022. Monthly cash payments reduce spells of poverty across the year. Poverty & Social Policy Brief, vol. 6, no. 5. New York: Center on Poverty and Social Policy at Columbia University.
In the News: Opinion: The key to reducing childhood poverty? Child tax credits distributed monthly, The Hill (June 2022)
We outline key shortcomings in the existing system of US public support for families with children, the ways in which these shortcomings have been exacerbated in the COVID-19 economic response package to date, and how a national child allowance—designed with key principles in mind—can provide the immediate relief families need during the pandemic and the unfolding economic downturn, as well as lay the foundation for positive health and development for all children in the years to follow.
Curran, Megan and Elisa Minoff. 2020. Supporting children and families through the pandemic, and after: The case for a US child allowance. Social Sciences & Humanities Open. 2020; 2(1): 100040. doi: 10.1016/j.ssaho.2020.100040
Our 2019 original analysis of the American Family Act finds this proposed Child Tax Credit reform could move 4 million children out of poverty and cut deep poverty among children in half. This policy change presents an opportunity to transform the credit into one that works for all children, not just those whose parents earn enough to qualify. We also demonstrate that policy design matters: under an alternative scenario—if the credit values of the Child Tax Credit were to increase, but with the credit still tied to earnings—the anti-poverty impact would be greatly reduced and children with the fewest resources would again be left out.
Collyer, Sophie, Wimer, Christopher, and David Harris. 2019. Earnings requirements, benefit values, and child poverty under the Child Tax Credit: Eliminating the earnings requirement does more to impact child poverty than increasing benefit levels. Poverty and Social Policy Brief, vol. 3, no. 3. New York: Center on Poverty and Social Policy, Columbia University.
We propose converting the Child Tax Credit and child tax exemption into a universal, monthly child allowance. Our proposal is based on principles we argue should undergird the design of such policies: universality, accessibility, adequate payment levels, and more generous support for young children. We estimate our proposed child allowance would reduce child poverty by about 40 percent, deep child poverty by nearly half, and would effectively eliminate extreme child poverty. Annual net cost estimates range from $66 billion to $105 billion.
Shaefer, Luke H., Sophie Collyer, Greg Duncan, Kathryn Edin, Irwin Garfinkel, David Harris, Timothy M. Smeeding, Jane Waldfogel, Christopher Wimer and Hirokazu Yoshikawa. 2018. A universal child allowance: A plan to reduce poverty and income instability among children in the United States. The Russell Sage Foundation Journal of the Social Sciences, vol. 4, no. 2, pp. 22-42.
Though the Earned Income Tax Credit and the Child Tax Credit are some of the nation’s most effective anti-poverty policies, they track earnings and therefore mirror the instability of recipients’ earnings over the year. A one-year “lookback” is a mechanism that would help reduce this instability. A lookback provision would allow EITC and CTC claimants to look back one year when filing taxes to maximize their credit and smooth earnings instability. This brief takes a first look at the potential effects of a lookback provision on poverty.
Wimer, Christopher, David Harris, JaeHyun Nam, and Antonina Pavlenko. 2017. Using the EITC and CTC to smooth income instability: Potential effects of a “lookback” on poverty. Poverty and Social Poverty Brief, vol. 1, no. 2. New York: Center on Poverty and Social Policy, Columbia University.
We point to an important difference between two types of programs: a dollar invested in a universal child allowance would do more to reduce child poverty than a dollar spent on an expanded child tax credit, because a universal child allowance reaches the poorest families, including those who do not have sufficient earnings to qualify for a work-conditioned Child Tac Credit. We find that a child allowance of $2,500 to all children under age 6 (leaving intact the Child Tax Credit for children age 6 and above) would lift 3.2 million children out of poverty and reduce the child poverty rate to 14.5 percent. Investing in a universal child allowance that provides $2,500 per child for all families with children (age 0–17) would lift 5.5 million children out of poverty and cut the child poverty rate to 11.4 percent. A $2,500 universal child allowance would more than triple the anti-poverty effect of the current Child Tax Credit.
Garfinkel, Irwin, David Harris, Jane Waldfogel, and Christopher Wimer. 2016. Doing more for our children: Modeling a universal child allowance or more generous Child Tax Credit. New York: The Century Foundation.
In this policy memo, published by the Scholars Strategy Network, we identify how inadvertent inequities in payment timing for newborns arose in the current law Child Tax Credit and in some prior versions of proposals for permanent expansion. It explains how the 2023 American Family Act—a proposal relevant to the 2025 federal tax debate—would deliver monthly Child Tax Credit benefits to all eligible newborns moving forward.
Curran, Megan A., David Harris, and Christopher Wimer. 2024. Equalizing the Child Tax Credit for babies: How the 2023 American Family Act treats infants. Boston, MA: The Scholars Strategy Network.
In this brief, we review the research on the potential impact of cash delivered during pregnancy on birth and longer-term outcomes. Research shows that pregnancy is an important period when contextual and environmental factors can impact children’s short- and long-term well-being and that beginning cash payments during pregnancy can yield important benefits. We also note that the US remains an outlier in the lack of cash support to families during pregnancy, despite these payments being common across other nations, and we catalogue the different ways in which policies deliver cash support during pregnancy across Organisation for Economic Co-operation and Development (OECD) countries.
Wimer, Christopher, Elizabeth Ananat, David Harris, Anastasia Koutavas, Dominic Richardson, and Ryan Vinh. 2023. Starting sooner: Should cash payments begin during pregnancy? Poverty and Social Policy Brief, vol. 7, no. 6. New York: Center on Poverty and Social Policy, Columbia University.
In this brief, we introduce the idea of a birth grant in the US, and provide evidence on how such a birth grant can reduce the heightened poverty surrounding a birth. Most wealthy, industrialized countries – though not the US – provide a ‘birth grant’, benefits or payments to parents of newborns to assist with parental and newborn expenses, which can be delivered at birth or prenatally. We find a one-time $1,800 birth grant would nearly eradicate poverty among mothers in the month of birth. If coupled with a monthly child allowance, poverty among mothers would be kept consistently lower throughout the first year of a child’s life.
Hamilton, Christal, David Harris, Christopher Wimer, Sara Kimberlin, Sophie Collyer, and Irwin Garfinkel. 2023. The case for a federal birth grant: A plan to reduce poverty for newborns and their families. Poverty and Social Policy Brief, vol. 7, no. 1. New York: Center on Poverty and Social Policy, Columbia University.