Estimating beneficiaries of the child tax credit: past, present, and future

Abstract

Government efforts to address child poverty commonly encompass economic assistance programs that bolster household income. The Child Tax Credit (CTC) is the most prominent example of this. Introduced by the United States Congress in 1997, the program endeavors to help working parents via income stabilization. Our work examines the extent to which the CTC has done so. Our study, which documents clear, consistent, and compelling evidence of gender inequity in benefits realization, yields four key findings. First, stringent requisite income thresholds disproportionally disadvantage single mothers, a reflection of the high concentration of this demographic in lower segments of the income distribution. Second, married parents and, to a lesser extent, single fathers, are the primary beneficiaries of the CTC program when benefits are structured as credits rather than refunds. Third, making program benefits more generous disproportionally reduces how many single mothers, relative to married parents and single fathers, can claim this benefit. Fourth and finally, increasing credit refundability can mitigate gender differences in relief eligibility, although doing so imposes externalities of its own. Our findings can inform public policy discourse surrounding the efficacy of programs like the CTC and the effectiveness of programs aimed at alleviating child poverty.