"Stacking" Matters: How the Order of Counting Resources Affects the Magnitude of Anti-Poverty Impacts: A Policy Explainer

"Stacking" Matters: How the Order of Counting Resources Affects the Magnitude of Anti-Poverty Impacts–A Policy Explainer

Government assistance programs significantly reduced poverty in 2021. The overall child poverty rate was 5.2%, when measured using the Supplemental Poverty Measure, or SPM, but would have been 25.2% without governmental assistance, including tax credits and in-kind transfers. The substantial anti-poverty impact of income transfers in 2021 is largely due to the various policy expansions that were implemented under American Rescue Plan Act (ARPA), which helped support families throughout the COVID-19 pandemic. In this policy explainer, we utilize three policies—Unemployment Insurance (UI), Economic Impact Payments (EIPs), and the Child Tax Credit (CTC)—as case studies to examine how the sequence in which income transfers are counted affects the magnitude of their estimated impact on the child poverty rate. While each policy certainly reduced the child poverty rate in 2021, our aim is to demonstrate the broader implications of “stacking” order, or the order in which policies are counted, when measuring their anti-poverty impacts on poverty rates.

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Key Findings

  • The order in which government benefits are “stacked”, or counted, affects the magnitude of the estimated impacts of individual policies on child poverty.
     
  • Policies exhibit the greatest impact in absolute terms when they are counted earlier in the benefit stacking sequence. In contrast, policies exhibit the greatest impact in relative terms when they are counted later in the sequence.
     
  • For example, the 2021 Child Tax Credit’s absolute impacts on the child poverty rate decline from 7.1 percentage points when counted first to 4.0 percentage points when counted last; relative impacts on the child poverty rate, by contrast, increase from 28.2% to 43.2% when counted first versus when counted last.
     
  • All three policies that we consider—Unemployment Insurance, Economic Impact Payments, and the Child Tax Credit—consistently demonstrate that the “stacking” order of counting benefits affects the magnitude of policies’ anti-poverty impacts. 

Suggested Citation:

Giorgianni, Sofia, Anastasia Koutavas, and Christopher Wimer. 2025. “Stacking” matters: How the order of counting government benefits affects the magnitude of policies’ antipoverty impacts. Poverty and policy explainer, vol. 9, no. 10. New York: Center on Poverty and Social Policy, Columbia University.

Published on August 8, 2025