IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/15937.html
   My bibliography  Save this paper

The Effects of Child Tax Benefits on Poverty and Labor Supply: Evidence from the Canada Child Benefit and Universal Child Care Benefit

Author

Listed:
  • Baker, Michael
  • Messacar, Derek
  • Stabile, Mark

Abstract

We investigate whether child tax benefits reduce child poverty and labor force participation among single mothers within the context of the 2015 expansion of the Canadian Universal Child Care Benefit (UCCB) and the 2016 introduction of the Canada Child Benefit (CCB). We compare single mothers to single childless women as single mothers have historically had the highest poverty rates. Our analysis indicates that both reforms reduced child poverty, although the Canada Child Benefit had the greater effect. We find no evidence of a labor supply response to either of the program reforms on either the extensive or intensive margins.

Suggested Citation

  • Baker, Michael & Messacar, Derek & Stabile, Mark, 2021. "The Effects of Child Tax Benefits on Poverty and Labor Supply: Evidence from the Canada Child Benefit and Universal Child Care Benefit," CEPR Discussion Papers 15937, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:15937
    as

    Download full text from publisher

    File URL: http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=15937
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bruce D. Meyer & Dan T. Rosenbaum, 2001. "Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers," The Quarterly Journal of Economics, Oxford University Press, vol. 116(3), pages 1063-1114.
    2. Henrik Kleven, 2020. "The EITC and the Extensive Margin: A Reappraisal," Working Papers 2020-64, Princeton University. Economics Department..
    3. Richard Blundell & Alan Duncan & Julian McCrae & Costas Meghir, 2000. "The labour market impact of the working families’ tax credit," Fiscal Studies, Institute for Fiscal Studies, vol. 21(1), pages 75-103, March.
    4. Douglas Almond & Janet Currie & Valentina Duque, 2018. "Childhood Circumstances and Adult Outcomes: Act II," Journal of Economic Literature, American Economic Association, vol. 56(4), pages 1360-1446, December.
    5. Nada Eissa & Jeffrey B. Liebman, 1996. "Labor Supply Response to the Earned Income Tax Credit," The Quarterly Journal of Economics, Oxford University Press, vol. 111(2), pages 605-637.
    6. Blundell, Richard & Macurdy, Thomas, 1999. "Labor supply: A review of alternative approaches," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 27, pages 1559-1695, Elsevier.
    7. Paul Gregg & Susan Harkness & Sarah Smith, 2009. "Welfare Reform and Lone Parents in the UK," Economic Journal, Royal Economic Society, vol. 119(535), pages 38-65, February.
    8. Derek Messacar, 2017. "Big Tax Data and Economic Analysis: Effects of Personal Income Tax Reassessments and Delayed Tax Filing," Canadian Public Policy, University of Toronto Press, vol. 43(3), pages 261-283, September.
    9. Paul Gregg & Susan Harkness, 2003. "Welfare Reform and Lone Parents Employment in the UK," The Centre for Market and Public Organisation 03/072, The Centre for Market and Public Organisation, University of Bristol, UK.
    10. Paul Gregg & Susan Harkness, 2003. "Welfare Reform and the Employment of Lone Parents," Palgrave Macmillan Books, in: Richard Dickens & Paul Gregg & Jonathan Wadsworth (ed.), The Labour Market Under New Labour, chapter 7, pages 98-115, Palgrave Macmillan.
    11. Milligan, Kevin & Stabile, Mark, 2007. "The integration of child tax credits and welfare: Evidence from the Canadian National Child Benefit program," Journal of Public Economics, Elsevier, vol. 91(1-2), pages 305-326, February.
    12. Jonathan Rhys Kesselman, 2019. "Policy Options for Retargeting the Canada Child Benefit," Canadian Public Policy, University of Toronto Press, vol. 45(3), pages 310-328, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Elizabeth Ananat & Benjamin Glasner & Christal Hamilton & Zachary Parolin, 2021. "Effects of the Expanded Child Tax Credit on Employment Outcomes: Evidence from Real-World Data," Poverty and Social Policy Brief 20414, Center on Poverty and Social Policy, Columbia University.
    2. Watson, Barry & Kong, Nancy & Phipps, Shelley, 2022. "Dreaming of a Brighter Future? The Impact of Economic Vulnerability on University Aspirations," IZA Discussion Papers 15539, Institute of Labor Economics (IZA).
    3. Jacob Goldin & Elaine Maag & Katherine Michelmore, 2021. "Estimating the Net Fiscal Cost of a Child Tax Credit Expansion," NBER Chapters, in: Tax Policy and the Economy, Volume 36, pages 159-195, National Bureau of Economic Research, Inc.
    4. Daniel Béland & Shannon Dinan & Philip Rocco & Alex Waddan, 2022. "COVID-19, poverty reduction, and partisanship in Canada and the United States [Early impact of the COVID-19 pandemic on household finances in Quebec]," Policy and Society, Oxford University Press, vol. 41(2), pages 291-305.
    5. Filip Premik, 2021. "Estimating the effects of universal transfers: new ML approach and application to labor supply reaction to child benefits," GRAPE Working Papers 54, GRAPE Group for Research in Applied Economics.
    6. Natasha Pilkauskas & Katherine Michelmore & Nicole Kovski & H. Luke Shaefer, 2022. "The Effects of Income on the Economic Wellbeing of Families with Low Incomes: Evidence from the 2021 Expanded Child Tax Credit," NBER Working Papers 30533, National Bureau of Economic Research, Inc.
    7. Geranda Notten & Fatima Tuz Zohora & Charles Plante & Rachel Laforest, 2022. "Two decades of poverty reduction politics in Canada:Better for single parent families and single working age adults?," Working Papers 2203E Classification-I31,, University of Ottawa, Department of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Richard Blundell & Mike Brewer & Marco Francesconi, 2008. "Job Changes and Hours Changes: Understanding the Path of Labor Supply Adjustment," Journal of Labor Economics, University of Chicago Press, vol. 26(3), pages 421-453, July.
    2. Fanny Moffette & Dorothée Boccanfuso & Patrick Richard & Luc Savard, 2013. "Estimating the Impact of the Québec’s Work Incentive Program on Labour Supply: An Ex Post Microsimulation Analysis," Cahiers de recherche 13-01, Departement d'Economique de l'École de gestion à l'Université de Sherbrooke.
    3. Richard Blundell & Mike Brewer & Marco Francesconi, 2005. "Job changes, hours changes and the path of labour supply adjustment," IFS Working Papers W05/21, Institute for Fiscal Studies.
    4. Lundberg, Jacob & Norell, John, 2018. "Taxes, benefits and labour force participation: A survey of the quasi-experimental literature," Ratio Working Papers 313, The Ratio Institute.
    5. Mike Brewer & Anita Ratcliffe & Sarah dSmith, 2012. "Does welfare reform affect fertility? Evidence from the UK," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(1), pages 245-266, January.
    6. Leon Bettendorf & Kees Folmer & Egbert Jongen, 2013. "The dog that did not bark: The EITC for single mothers in the Netherlands," CPB Discussion Paper 229, CPB Netherlands Bureau for Economic Policy Analysis.
    7. Bettendorf, Leon J.H. & Folmer, Kees & Jongen, Egbert L.W., 2014. "The dog that did not bark: The EITC for single mothers in the Netherlands," Journal of Public Economics, Elsevier, vol. 119(C), pages 49-60.
    8. Bargain, Olivier & Orsini, Kristian & Peichl, Andreas, 2011. "Labor Supply Elasticities in Europe and the US," IZA Discussion Papers 5820, Institute of Labor Economics (IZA).
    9. Olivier Bargain & Kristian Orsini & Andreas Peichl, 2014. "Comparing Labor Supply Elasticities in Europe and the United States: New Results," Journal of Human Resources, University of Wisconsin Press, vol. 49(3), pages 723-838.
    10. Kleven, Henrik Jacobsen & Kreiner, Claus Thustrup, 2006. "The marginal cost of public funds: Hours of work versus labor force participation," Journal of Public Economics, Elsevier, vol. 90(10-11), pages 1955-1973, November.
    11. Olivier Bargain & Mathias Dolls & Dirk Neumann & Andreas Peichl & Sebastian Siegloch, 2011. "Tax-Benefit Systems in Europe and the US: Between Equity and Efficiency," CESifo Working Paper Series 3534, CESifo.
    12. Olivier Bargain & Kristian Orsini & Andreas Peichl, 2012. "Comparing Labor Supply Elasticities in Europe and the US: New Results," Working Papers halshs-00805736, HAL.
    13. Klára Kalíšková, 2020. "Tax and transfer policies and the female labor supply in the EU," Empirical Economics, Springer, vol. 58(2), pages 749-775, February.
    14. Marco Francesconi & Helmut Rainer & Wilbert vanderKlaauw, 2009. "The Effects of In-Work Benefit Reform in Britain on Couples: Theory and Evidence," Economic Journal, Royal Economic Society, vol. 119(535), pages 66-100, February.
    15. Richard Blundell & Hilary W. Hoynes, 2004. "Has 'In-Work' Benefit Reform Helped the Labor Market?," NBER Chapters, in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980–2000, pages 411-460, National Bureau of Economic Research, Inc.
    16. Fabrizio Colonna & Stefania Marcassa, 2015. "Taxation and female labor supply in Italy," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-29, December.
    17. Kalíšková, Klára, 2015. "Tax and transfer policies and female labor supply in the EU," EUROMOD Working Papers EM1/15, EUROMOD at the Institute for Social and Economic Research.
    18. Helmut Rainer & Stefan Bauernschuster & Natalia Danzer & Timo Hener & Christian Holzner & Janina Reinkowski, 2013. "Kindergeld," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 60.
    19. Véronique Delarue, 2000. "Le Working Families Tax Credit, un nouveau crédit d'impôt pour les familles de travailleurs à bas revenus au Royaume-Uni," Économie et Statistique, Programme National Persée, vol. 335(1), pages 47-61.
    20. Kosonen Tuomas, 2014. "To Work or Not to Work? The Effect of Childcare Subsidies on the Labour Supply of Parents," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 14(3), pages 1-32, July.

    More about this item

    JEL classification:

    • H27 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other Sources of Revenue
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:15937. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://www.cepr.org .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.