Working Paper: NBER ID: w31110
Authors: Brandon Enriquez; Damon Jones; Ernest V. Tedeschi
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.
Keywords: Child Tax Credit; Labor Supply; Cash Transfers
JEL Codes: D63; H24; J22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| expanded Child Tax Credit (CTC) (J13) | labor supply (J20) |
| expanded Child Tax Credit (CTC) (J13) | labor force participation (J22) |
| expanded Child Tax Credit (CTC) (J13) | hours worked (J22) |
| expanded Child Tax Credit (CTC) (J13) | labor supply elasticity (J20) |