The data speak volumes in support of the monthly child tax credit
Last year’s pandemic relief package, America’s Bailout, may have held the key to a long-term strategy to end child poverty in America. Studies over the past year have found significant evidence that one policy extension effectively reduces hardship, boosts families’ financial security and supports mothers in the workplace: the Monthly Child Tax Credit .
In a recently published study, my colleagues and I surveyed some 1,200 parents who received the Child Tax Credit in monthly installments from July to December 2021. We also surveyed a control group of Americans with income levels similar in order to draw conclusions about the benefits that receiving a monthly tax cut could bring to a wide range of areas, including work, health, and financial stability.
We found that families were more financially secure, more likely to work, and better equipped to make healthy choices thanks to monthly child tax credit payments. The wide range of observed benefits for families, coupled with the policy’s established cost-effectiveness, make it a prime candidate for long-term use to strengthen American households.
Our study found that families used the Monthly Child Tax Credit to cover routine expenses that families would be expected to face regularly on a monthly basis. Groceries, paying rent, and clothing were among the most common uses. In addition to covering these expenses, families receiving the CTC were less likely to be evicted from their homes. They were also able to pay off credit card debt, save for emergency funds, and forgo other sources of income like selling blood plasma and payday loans.
As observed by the Census Bureau, hunger in households receiving the Monthly Child Tax Credit was reduced by 24% after the first payment in July 2021. Our own observations reveal that not only were fewer families suffering from hunger, but that families were also equipped to prepare healthier foods. choices. Recipient households were more likely to increase their consumption of fruit, as well as meat and protein intake, and more likely to report an increased ability to afford balanced meals compared to households not receiving the credit.
Over the long term, reducing household hunger would likely bring measurable improvements in child development. A 2015 Center for American Progress article found that food insecurity significantly increases a child’s risk of long-term developmental delays. Reducing hunger through policies such as the CTC would lift millions of children out of situations in which their level of income would have a negative effect on their education and development.
The monthly CTC is important to me both as a researcher and as a mother. I spent the first few months of the pandemic bouncing a baby, quasi-joining Zoom meetings, homeschooling my preschooler, and doing real work after bedtime. . My patience was thin, my productivity nearly non-existent, and my functional ability rapidly diminishing in all areas of life. In a way, I was still one of the privileged few to get through the past two years with my family’s physical and financial health more or less intact.
Millions of mothers have left the workforce, either because they worked in sectors more vulnerable to layoffs (such as the service sector) or because of increased care responsibilities (ill family members, closure daycare, distance learning, etc.). The mental health of parents and children has declined and domestic violence has increased. For those struggling during the pandemic, the monthly child tax credit support was a lifeline.
Ninety-four percent of parents receiving monthly Child Tax Credit payments said they would work the same amount or more with the credit. More than half of those who said they worked less were parents of infants or toddlers. After the credit expired, about 1.4 million households experienced a decline in employment in one way or another. Multiple analyzes found no significant difference in the employment patterns of recipients and non-recipients over the six months of the credit. Contrary to the predictions of its detractors, the monthly child tax credit has been enable work, without providing an incentive to avoid earning a paycheck.
Nearly two-thirds of parents in our survey expressed a preference for monthly payments over CTC’s flat-rate annual iteration, and it’s not hard to see why. The costs on which parents used the credit demonstrate that the payments are much more useful to households as regular monthly support. Families don’t budget on a yearly basis – they budget according to the timelines set by their usual work income and the costs they need to cover to meet their basic needs.
As one father in Arizona explained, “We didn’t have to figure out how to stretch our tax return all year. Warning.”
While some families, like mine, are slowly regaining some sense of normalcy after two years of the pandemic, for many others the end of credit means a return to economic insecurity and having to choose between paying bills and to buy food. In just the first six months of the credit, child poverty fell by 30%, but rose again by 41% immediately after the last monthly payment in December. This policy has proven to be an effective means of reducing family difficulties and poverty. We have the tools to correct course. The only question that remains is whether we have the political will to do so.
Leah Hamilton is an associate professor at Appalachian State University and an affiliate professor at the Social Policy Institute at Washington University in St. Louis.
The opinions expressed in this article are those of the author.