Effects of the Expansion of the Earned Income Tax Credit for Childless Young Adults on Material Wellbeing

Abstract

In 2021, the U.S. Congress temporarily expanded the Earned Income Tax Credit for workers without a qualifying child (childless EITC), to help counteract the impact of the COVID-19 pandemic on lower-wage working adults. This expansion roughly tripled the maximum benefits for qualifying filers and lowered the minimum age to claim the credit from 25 to 19, providing new benefits to low-income young adults. Using data from the Census Bureau’s Household Pulse Survey and a difference-in-differences design, this study is among the first to examine the impact of the expanded childless EITC on young adults’ material hardship (food, housing, and expenses). We find that the temporary expansion led to a significant decrease in housing hardship among low-income, childless, young adults, and suggestive evidence that it also reduced food insufficiency and difficulty with expenses. Overall our findings show that the temporary expansion of the childless EITC helped reduce material hardship among young adults.

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Author Affiliations:

Jiwan Lee and Christopher Wimer, Columbia University, Center on Poverty and Social Policy

Katherine Michelmore and Natasha Pilkauskas, University of Michigan

Suggested Citation:

Lee, Jiwan, Katherine Michelmore, Natasha Pilkauskas, and Christopher Wimer. 2024. Effects of the expansion of the Earned Income Tax Credit for childless young adults on material wellbeing. NBER Working Paper Series. Cambridge, MA: National Bureau of Economic Research.