New Study Sheds Light on the Impact of the 2021 Child Tax Credit

New research by two social work faculty demonstrates that 2021 Child Tax Credit (CTC) expansion did not have a major negative impact on the employment rate of caregivers who were eligible to receive the benefit. Assistant Professor Jessica Pac and Vilas Distinguished Achievement Professor Lonnie Berger demonstrated that the CTC expansion was associated with a statistically insignificant decrease in employment rates for caregivers when compared to employment rates of childless adults.

Lonnie Berger standing in front of a white wall
Dr. Lonnie Berger
Jessica Pac in front of a bookcase
Dr. Jessica Pac

The 2021 expansion of the Child Tax Credit benefit provided support during the Covid-19 pandemic by increasing the amount of the credit, making it fully refundable, and providing the credit in the form of monthly payment from July-December 2021. 

The study, “Quasi-experimental Evidence on the Employment Effects of the 2021 Fully Refundable Monthly Child Tax Credit,” was published in The Journal of Policy Analysis and Management.

As stated in the the article, these findings, “contribute to the current debate over the possibility of a non-work-conditioned child allowance-type cash transfer in the United States, which has the potential to reduce child poverty while also giving caregivers the autonomy to allocate time and expenditures to address their children’s needs.”