Spending Responses to the Child Tax Credit Expansions

Jonathan Fisher, Jake Schild and David S. Johnson

The ANNALS of the American Academy of Political and Social Science, 2023, vol. 710, issue 1, 108-123

Abstract: This article summarizes research literature that has studied how people used the advance Child Tax Credit (CTC) payments that were disbursed by the IRS in 2021. Four primary findings emerge. The ways in which families used the advance CTC payments varied: during the first few months the payments were being distributed, families reported paying down debt more frequently; and in the final months of the payments, families reported more frequent spending. Families primarily used the monthly CTC on household necessities and child-related spending. There was heterogeneity in the spending response across income and race. Lastly, the CTC helped families deal with rising inflation. We discuss these four findings from the extant research in detail.

Keywords: spending; saving; consumption; Child Tax Credit (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:sae:anname:v:710:y:2023:i:1:p:108-123

DOI: 10.1177/00027162241263180

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