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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 Benefit

Author

Listed:
  • Michael Baker
  • Derek Messacar
  • Mark Stabile

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

  • Michael Baker & Derek Messacar & Mark Stabile, 2021. "The Effects of Child Tax Benefits on Poverty and Labor Supply: Evidence from the Canada Child Benefit and Universal Child Care Benefit," NBER Working Papers 28556, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:28556
    Note: CH LS
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    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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