While studying the Child Tax Credit the Social Policy Institute researched how the credit has affected employment. Over the course of the payments in 2021, a debate has emerged over whether or not the expanded CTC will cause parents to leave the workforce. On one side of the debate, a large number of economists have argued that the CTC will not cause a reduction in employment. However, a study in October 2021 used a simulation approach to estimate that 2.6% of parents will exit the labor force as a result of the CTC.
In response to this study, the research team at SPI addressed the question of whether the CTC is affecting parents’ employment by using on-the-ground data from the Census Household Pulse survey to compare employment trends among parents and non-parents before and after the CTC payments began.