Abstract: This paper examines the effects of the 2021 temporary expansion of the Child Tax Credit that provided monthly payments to families with children from July to December 2021. Using a parameterized difference-in-differences approach, we examine the effect of the monthly credit on material hardship, ability to meet needs, money on hand, use of friends and family for assistance, and employment among a sample of parents with very low incomes. We find evidence that the credit reduced the number of hardships families experienced, and in particular their food insecurity. We also find some evidence that the credit reduced medical hardships, reduced reliance on friends and family for food, and improved respondents ability to pay utility bills. The 2021 CTC had no effect on any labor supply measures. Analyses that examine differences by racial/ethnic groups show that the effects were somewhat stronger for Black families than for Hispanic and White families, but the differences were not large.

Bio: Natasha Pilkauskas is an associate professor of public policy at the Gerald R. Ford School of Public Policy at the University of Michigan. Pilkauskas’ research considers how demographic, social safety net, and economic shifts in the U.S. affect low-income families with children. Specifically, her work examines children’s shared living arrangements, economic insecurity among vulnerable populations, and the effects of cash transfers, such as tax credits, on the health and wellbeing of families with low-incomes. Pilkauskas received her Ph.D. in social welfare policy from Columbia University, a Masters in Public Policy from Harvard University, and a B.A. in economics and sociology from Northwestern University.

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