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

Jiwan Lee, Katherine Michelmore, Natasha Pilkauskas and Christopher Wimer

No 32571, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: H20 I32 J08 (search for similar items in EconPapers)
Date: 2024-06
New Economics Papers: this item is included in nep-lab, nep-pbe and nep-pub
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