Employment and Labor Supply Responses to the Child Tax Credit Expansion: Theory and Evidence

Diane Schanzenbach and Michael Strain

No 32552, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The 2021 Child Tax Credit (CTC) expansion increased government benefits to families, and especially to families with the lowest incomes. Economic theory predicts that this policy intervention would have led to a reduction in labor supply among adults in those families. Our review of available research suggests that employment within broadly defined demographic groups was not reduced by the 2021 CTC changes. However, we present evidence that employment was reduced among mothers with relatively low levels of education — the demographic group that was most affected by the CTC expansion. For the 2021 CTC expansion, theory and evidence were in the strongest alignment when the research design that produced the evidence was most focused on the demographic groups most likely to be affected by the expansion.

JEL-codes: J2 (search for similar items in EconPapers)
Date: 2024-06
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Published as Diane Whitmore Schanzenbach & Michael R. Strain, 2023. "Employment and Labor Supply Responses to the Child Tax Credit Expansion: Theory and Evidence," The ANNALS of the American Academy of Political and Social Science, vol 710(1), pages 141-156.

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Related works:
Working Paper: Employment and Labor Supply Responses to the Child Tax Credit Expansion: Theory and Evidence (2024)
Journal Article: Employment and Labor Supply Responses to the Child Tax Credit Expansion: Theory and Evidence (2023)
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