The Short-Term Labor Supply Response to the Expanded Child Tax Credit

Brandon Enriquez, Damon Jones and Ernie Tedeschi

AEA Papers and Proceedings, 2023, vol. 113, 401-05

Abstract: We estimate the extensive and intensive margin labor supply response to the monthly Child Tax Credit disbursed in 2021 as a part of the American Rescue Plan Act. Using Current Population Survey microdata, we compare labor supply outcomes among households who qualify for varying relative increases in household income as a result of their income level and household size. We do not find strong evidence of a change in labor supply for families receiving the credit. The results are robust to alternative labor supply models, where households respond mainly to cash on hand or changes in the annual budget set.

JEL-codes: D12 G51 H24 H31 I38 J13 J22 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1257/pandp.20231087

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