Friday, March 3, 2023

The Antipoverty Effects of the Expanded Child Tax Credit across States: Where Were the Historic Reductions Felt?

Economic Analysis from The Hamilton Project

Child poverty is a persistent national issue with lifetime and intergenerational consequences, but the distribution of its incidence and its impacts vary. One dimension that deserves attention is the variation in child poverty by state and the effectiveness of and potential for federal policy to confront the problem. In this essay, the authors investigate how the CTC affected child poverty in states by two characteristics: state-level cost of living (high-cost versus low-cost states) and state-level poverty (high versus low pre-tax/transfer poverty rates). They find that while the CTC caused substantial reductions in poverty in each kind of state, poverty reductions were the highest in low-cost, high poverty states, i.e., those states with relatively lower cost of living and with a higher poverty baseline. Read the entire essay and see graphics here