The Short-Term Labor Supply Response to the Expanded Child Tax Credit
AEA Papers and Proceedings
vol. 113,
May 2023
(pp. 401-05)
Abstract
We estimate the extensive and intensive margin labor supply response to the monthly Child Tax Credit disbursed in 2021 as a part of the American Rescue Plan Act. Using Current Population Survey microdata, we compare labor supply outcomes among households who qualify for varying relative increases in household income as a result of their income level and household size. We do not find strong evidence of a change in labor supply for families receiving the credit. The results are robust to alternative labor supply models, where households respond mainly to cash on hand or changes in the annual budget set.Citation
Enriquez, Brandon, Damon Jones, and Ernie Tedeschi. 2023. "The Short-Term Labor Supply Response to the Expanded Child Tax Credit." AEA Papers and Proceedings, 113: 401-05. DOI: 10.1257/pandp.20231087Additional Materials
JEL Classification
- D12 Consumer Economics: Empirical Analysis
- G51 Household Finance: Household Saving, Borrowing, Debt, and Wealth
- H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
- H31 Fiscal Policies and Behavior of Economic Agents: Household
- I38 Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
- J13 Fertility; Family Planning; Child Care; Children; Youth
- J22 Time Allocation and Labor Supply