Effects of Child Tax Benefits on Poverty and Labor Supply: Evidence from the Canada Child Benefit and Universal Child Care Benefit

Michael Baker, Derek Messacar and Mark Stabile

Journal of Labor Economics, 2023, vol. 41, issue 4, 1129 - 1182

Abstract: We investigate how reforms of Canada’s child allowances affected household poverty and maternal employment—the 2015 increase and expansion of the Universal Child Care Benefit and the 2016 introduction of a new Canada Child Benefit (CCB). We document that both reforms reduced child poverty, although the CCB had greater effect. By 2018, we estimate that the CCB reduced poverty by 11% in families headed by a single mother and by nearly 17% in two-parent families. We find no evidence, on either the extensive or the intensive margin, of a negative labor supply response to either of the program reforms.

Date: 2023
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Working Paper: The Effects of Child Tax Benefits on Poverty and Labor Supply: Evidence from the Canada Child Benefit and Universal Child Care Benefit (2021)
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