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The Short-Term Labor Supply Response to the Expanded Child Tax Credit

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Listed:
  • 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.

Suggested Citation

  • Brandon Enriquez & Damon Jones & Ernest V. Tedeschi, 2023. "The Short-Term Labor Supply Response to the Expanded Child Tax Credit," NBER Working Papers 31110, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:31110
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    More about this item

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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