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Title: The Child Tax Credit, Labor Supply, and Poverty
Citation Type: Working Paper
Publication Year: 2021
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Abstract: In the paper, “The Anti-Poverty, Targeting, and Labor Supply Effects of the Proposed Child Tax Credit Expansion,” hereafter, Corinth et al. (2021), we examine the effects of proposed changes to the Child Tax Credit (CTC) on labor supply and poverty. We find that the Build Back Better Act changes would have negative consequences. By eliminating the strong work incentives in the previous CTC, we estimate that the proposal would reduce employment by approximately 1.5 million workers, which would diminish the proposal’s effect on child poverty and eliminate its effect on deep child poverty altogether. Even without accounting for the reduction in work, the expansion would be less targeted to those in the bottom decile of annual income and have less poverty reduction per dollar spent on families with children than most other anti-poverty programs.
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Authors: Corinth, Kevin; Meyer, Bruce D
Series Title: CID Research Note Series
Publication Number: 1
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Pages: 1-6
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Data Collections: IPUMS CPS
Topics: Family and Marriage, Labor Force and Occupational Structure, Poverty and Welfare
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