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Effects of the Expansion of the Earned Income Tax Credit for Childless Young Adults on Material Wellbeing

Author

Listed:
  • Jiwan Lee
  • Katherine Michelmore
  • Natasha Pilkauskas
  • Christopher Wimer

Abstract

In 2021, the U.S. Congress temporarily expanded the Earned Income Tax Credit for workers without a qualifying child (childless EITC), to help counteract the impact of the COVID-19 pandemic on lower-wage working adults. This expansion roughly tripled the maximum benefits for qualifying filers and lowered the minimum age to claim the credit from 25 to 19, providing new benefits to low-income young adults. Using data from the Census Bureau’s Household Pulse Survey and a difference-in-differences design, this study is among the first to examine the impact of the expanded childless EITC on young adults’ material hardship (food, housing, and expenses). We find that the temporary expansion led to a significant decrease in housing hardship among low-income, childless, young adults, and suggestive evidence that it also reduced food insufficiency and difficulty with expenses. Overall our findings show that the temporary expansion of the childless EITC helped reduce material hardship among young adults.

Suggested Citation

  • Jiwan Lee & Katherine Michelmore & Natasha Pilkauskas & Christopher Wimer, 2024. "Effects of the Expansion of the Earned Income Tax Credit for Childless Young Adults on Material Wellbeing," NBER Working Papers 32571, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:32571
    Note: CH PE
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    More about this item

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies

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