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September 10, 2025Management Science

Effects of the 2021 Expanded Child Tax Credit

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Authors

BLBen LourieDSDevin M. ShanthikumarTSTerry Shevlin

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Overview

Analysis reveals increased consumption and reduced liquidity constraints among lower-income recipients, indicating effective policy outcomes.

Key Points

  • Recipients significantly increase consumption following CTC payments, particularly among lower-income individuals.
  • Monthly payments lead to decreased use of high-interest loans and gig work, enhancing financial stability.
  • The study employs difference-in-difference analyses to capture diverse effects across nearly two million individuals.
  • The findings suggest that monthly CTC payments are more effective than annual refunds in alleviating liquidity constraints.

Cite This Study

Lourie et al. (2025) studied this question.

synapsesocial.com/papers/68c19f9154b1d3bfb60daddehttps://doi.org/10.1287/mnsc.2023.02254
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