Categories
How to Cite
Abstract
This paper investigates the impact of state-level child tax credits (CTCs) on reducing financial instability, in the form of food insecurity and difficulty in paying household expenses. Using a difference-in-differences approach, regressions are run for two pairs of states, each pair featuring one state that has recently enacted a CTC, Oregon and Minnesota, and one that has not, Washington and Wisconsin. Utilizing survey data from the Census Bureau’s Household Pulse Survey, the two natural experiments are analyzed to gauge the effectiveness of these state-level policies. Results indicate a 45% decline in the likelihood of food insecurity and expense difficulty in Oregon after the beginning of early tax filing in late January. However, the results for Minnesota have no statistical significance, indicating that state-specific conditions can impact the success of CTC policy. Future research into the changing impacts of CTC policy as Oregon and Minnesota move to advance payments of the credit, along with analysis of other state-level CTCs across the U.S., are warranted to further gauge the impacts of this type of policy.
References
Aizer, A., Lleras-Muney, A., & Michelmore, K. (2024, June 24). The effects of the 2021 Child Tax Credit on Child Developmental Outcomes. NBER. https://www.nber.org/papers/w32609
Ananat, E., Glasner, B., Hamilton, C., & Parolin, Z. (2022, March). Effects of the Expanded Child Tax Credit on Employment Outcomes: Evidence from Real-World Data from April to December 2021. NBER. https://www.nber.org/papers/w29823
Bauer, L., Pitts, A., Ruffini, K., & Schanzenbach, D. W. (2020). The effect of Pandemic EBT on measures of food hardship. Brookings Institution. https://www.brookings.edu/research/the-effect-of-pandemic-ebt-on-measures-of-food-hardship
Cox, K., Caines, R., Sherman, A., & Rosenbaum, D. (2021, August 5). State and Local Child Tax Credit Outreach Needed to Help Lift Hardest-to-Reach Children Out of Poverty. Center on Budget and Policy Priorities. https://www.cbpp.org/research/federal-tax/state-and-local-child-tax-credit-outreach-needed-to-help-lift-hardest-to-reach
Curran, M. A. (2022). Research Roundup of the Expanded Child Tax Credit: One Year On. Poverty & Social Policy Report, 6(9). Center on Poverty and Social Policy at Columbia University.
Enriquez, B., Jones, D., & Tedeschi, E. V. (2023, April 10). The short-term labor supply response to the expanded child tax credit. NBER. https://www.nber.org/papers/w31110
Gennetian, L. A., & Gassman-Pines, A. (2024, July 15). The effects of the 2021 Child Tax Credit on parents’ psychological well-being. NBER. https://www.nber.org/papers/w32662
Greenstein, R. (2024). The 2021 Child Tax Credit in U.S. Historical Context. The ANNALS of the American Academy of Political and Social Science, 710(1). https://doi.org/10.1177/00027162241258853
Hubbard, R. (2024, February 20). House panel hears Minnesota’s new child tax credit up and running. House panel hears Minnesota’s new child tax credit up and running. https://www.house.mn.gov/SessionDaily/Story/18080
Parolin, Z., Ananat, E., Collyer, S., Curran, M., & Wimer, C. (2021). The initial effects of the expanded Child Tax Credit on material hardship (NBER Working Paper No. 29285). National Bureau of Economic Research. https://www.nber.org/system/files/working_papers/w29285/w29285.pdf
This work is licensed under a Creative Commons Attribution 4.0 International License.
Copyright (c) 2025 Tyler Edwards