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

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

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

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

    1. 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.
    2. Wayne Simpson & Harvey Stevens & Lee Stevens & Herb Emery, 2022. "A Guaranteed Basic Income for Canadians: Off the Table or Within Reach?," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 15(20), June.
    3. Natasha V. Pilkauskas & Katherine Michelmore & Nicole Kovski & H. Luke Shaefer, 2024. "The expanded Child Tax Credit and economic wellbeing of low-income families," Journal of Population Economics, Springer;European Society for Population Economics, vol. 37(4), pages 1-35, December.
    4. Mari, Gabriele, 2023. "Less for more? Cuts to child benefits, family adjustments, and long-run child outcomes in larger families," SocArXiv e3n82, Center for Open Science.
    5. 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.
    6. JungHo Park & Sujin Kim, 2023. "Child Tax Credit, Spending Patterns, and Mental Health: Mediation Analyses of Data from the U.S. Census Bureau’s Household Pulse Survey during COVID-19," IJERPH, MDPI, vol. 20(5), pages 1-17, March.
    7. 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.
    8. 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.
    9. 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).
    10. Jessica Pac & Lawrence M. Berger, 2024. "Quasi‐experimental evidence on the employment effects of the 2021 fully refundable monthly child tax credit," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 43(1), pages 192-213, January.
    11. Jennifer Glass & Carolyn E. Waldrep, 2023. "Child Allowances and Work-Family Reconciliation Policies: What Best Reduces Child Poverty and Gender Inequality While Enabling Desired Fertility?," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 42(5), pages 1-57, October.
    12. 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.
    13. 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, Darryl S. Jarvis and M. Ramesh, vol. 41(2), pages 291-305.

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    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

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