Abstract
A key component of the American Rescue Plan Act of 2021 included an expansion of the Child Tax Credit with advance payments beginning in July 2021, a "child allowance" that was projected to dramatically reduce child poverty. Food insufficiency has increased markedly during the economic crisis spurred by the COVID-19 pandemic, with disparities among marginalized populations, and may be associated with substantial health care and social costs. To assess whether the introduction of advance payments for the Child Tax Credit in mid-July 2021 was associated with changes in food insufficiency in US households with children. This cross-sectional study used data from several phases of the Household Pulse Survey, conducted by the US Census Bureau from January 6 to August 2, 2021. The survey had 585 170 responses, representing a weighted population size of 77 165 153 households. The first advance Child Tax Credit payment, received on July 15, 2021. Household food insufficiency. The weighted sample of 585 170 respondents was mostly female (51.5%) and non-Hispanic White (62.5%), with a plurality aged 25 to 44 years (48.1%), having a 4-year degree or more (34.7%) and a 2019 household income of $75 000 to $149 999 (23.1%). In the weeks after the first advance payment of the Child Tax Credit was made (July 21 to August 2, 2021), 62.4% of households with children reported receiving it compared with 1.1% of households without children present (P < .001). There was a 3.7-percentage point reduction (95% CI, -0.055 to -0.019 percentage points; P < .001) in household food insufficiency for households with children present in the survey wave after the first advance payment of the Child Tax Credit, corresponding to a 25.9% reduction, using an event study specification. Difference-in-differences (-16.4%) and modified Poisson (-20.8%) models also yielded large estimates for reductions in household food insufficiency associated with the first advance payment of the expanded Child Tax Credit. This study suggests that the Child Tax Credit advance payment increased household income and may have acted as a buffer against food insufficiency. However, its expansion and advance payment are only a temporary measure for 2021. Congress must consider whether to extend these changes or make them permanent and improve implementation to reduce barriers to receipt for low-income families.
Highlights
The COVID-19 pandemic caused more than 50 million people to lose work, mostly in low-income households.[1]
There was a 3.7–percentage point reduction in household food insufficiency for households with children present in the survey wave after the first advance payment of the Child Tax Credit, corresponding to a 25.9% reduction, using an event study specification
Difference-in-differences (−16.4%) and modified Poisson (−20.8%) models yielded large estimates for reductions in household food insufficiency associated with the first advance payment of the expanded Child Tax Credit
Summary
The COVID-19 pandemic caused more than 50 million people to lose work, mostly in low-income households.[1]. This first reform to the CTC noted above has important equity implications, as Black, Hispanic, and Native American families often earned too little to receive the full benefit; the tax filing requirement for automatic receipt of the advance payments may still differentially disadvantage Black, Hispanic, and Native American families, calling into question how much this policy change can help narrow racial and ethnic disparities in reality without adjustments to its implementation
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