Spending Responses to the Child Tax Credit Expansions
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040224-WP-Spending Responses to the Child Tax Credit Expansions-Fisher Schild and Johnson
040224-WP-Spending Responses to the Child Tax Credit Expansions-Fisher Schild and Johnson
Authors:
Jonathan Fisher, Washington Center for Equitable Growth
Jake Schild, U.S. Bureau of Labor Statistics
David S. Johnson, National Academies of Sciences, Engineering, and Medicine
Abstract:
This article summarizes the literature that studied how people used the 2021 advance Child Tax Credit. Four primary findings emerged. Families more frequently reporting paying down debt during the first few months the payments were being distributed. In the final months of payments, families more frequently reported spending it. Families primarily used the monthly CTC on household necessities and child-related spending. There was heterogeneity in the spending response across income and race. Lastly, the CTC helped families deal with rising inflation.
