The Potential Long-Run Implications of a Permanently-Expanded Child Tax Credit

Elizabeth Ananat and Irwin Garfinkel

No 32870, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: For many of those who worked to include an expanded Child Tax Credit in the 2021 American Rescue Plan, an important motivation was to test the feasibility and effectiveness of a permanent U.S. child allowance similar to those provided in other rich countries. Because this expansion was short-lived, however, evaluations of its effects cannot provide complete evidence on the long-run effects of a permanently expanded CTC. We leverage theoretical predictions from standard economic models, behavioral science, and child development frameworks, along with empirical evidence from literature evaluating previous long-term cash and quasi-cash transfers to families with children, to predict the likely long-run impacts of a permanent child allowance. We find that it would lead to increased future earnings and tax payments, improved health and longevity, and reduced health care, crime, and child protection costs; using conventional valuations, benefits to society outweigh costs nearly 10 to 1, with most benefits due to credit refundability.

JEL-codes: H31 I38 (search for similar items in EconPapers)
Date: 2024-08
New Economics Papers: this item is included in nep-hea and nep-pbe
Note: CH
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.nber.org/papers/w32870.pdf (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:nbr:nberwo:32870

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w32870

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().