State Child Tax Credits and Parental Labor Supply: Evidence from Staggered Adoption

Justin White (), Ziyue Xu (), Rita Hamad () and Zachary Parolin ()
Additional contact information
Justin White: Department of Health Law, Policy & Management, Boston University
Ziyue Xu: Department of Health Law, Policy & Management, Boston University
Rita Hamad: Department of Social and Behavioral Sciences, Harvard T.H. Chan School of Public Health
Zachary Parolin: The Institute for New Economic Thinking at the Oxford Martin School, University of Oxford

INET Oxford Working Papers from Institute for New Economic Thinking at the Oxford Martin School, University of Oxford

Abstract: States increasingly supplement the federal Child Tax Credit (CTC) with credits that vary in generosity, refundability, and earnings requirements. We examine changes in parental employment, labor force participation, and work hours following state CTC adoption using the Current Population Survey Annual Social and Economic Supplement (CPS-ASEC), 2004–2026. Our preferred stacked difference-in-differences design includes 12 adopting states with complete event-time support and compares them with never-treated states and states that adopted after our evaluation window. Averaging over the first three post-adoption survey years, the estimated effect is 0.05 percentage points (SE 1.03) for employment and −0.46 points (0.82) for labor force participation; estimates for work hours are also close to zero. Across secondary specifications and CPS Basic Monthly analyses, extensive-margin estimates were similarly small. Larger simulated benefits are associated with fewer hours among employed parents, but the relationship is also evident before adoption and may partly reflect how benefits depend on earnings. Overall, the estimates provide little indication that state CTC adoption has substantially reduced parental employment, although meaningful effects in either direction cannot be ruled out under moderate departures from parallel trends.

Keywords: Child Tax Credit; labor supply; employment; state policy; difference-in-differences; tax credits (search for similar items in EconPapers)
JEL-codes: H24 H75 I38 J22 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2026-10
New Economics Papers: this item is included in nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://oms-inet.files.svdcdn.com/production/files ... 26.pdf?dm=1791991946 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:amz:wpaper:2026-28

Access Statistics for this paper

More papers in INET Oxford Working Papers from Institute for New Economic Thinking at the Oxford Martin School, University of Oxford Contact information at EDIRC.
Bibliographic data for series maintained by INET Oxford admin team ().