Absence Of Monthly Ctc Leads To 3 7 Million More Children In Poverty J
Summary
A policy brief from the Columbia University Center on Poverty and Social Policy by Zachary Parolin, Sophie Collyer and Megan A. Curran, published as Poverty and Social Policy Brief Vol 6., no. 2 in 2022. The brief reports that the monthly child poverty rate rose from 12.1 percent in December 2021 to 17 percent in January 2022, which it attributes to the expiration of the monthly Child Tax Credit payments and equates to 3.7 million more children in poverty. A table breaks down the change by race and ethnicity, with Latino children showing a 7.1 percentage point increase. The brief states that SNAP emergency allotments kept 1.6 million children from poverty and projects temporary dips in child poverty during the 2022 tax season. It closes with a methods section describing its monthly Supplemental Poverty Measure framework and a list of references.
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Absence of Monthly Child Tax Credit Leads
to 3.7 Million More Children in Poverty in January 2022
Child Poverty Rises From 12.1% to 17%, Highest Rate Since December 2020
Columbia University Center on Poverty and Social Policy
Zachary Parolin Sophie Collyer Megan A. Curran
Bocconi University Columbia University Columbia University
The monthly child poverty rate increased from 12.1 percent in December 2021 to 17 percent in
January 2022, the highest rate since the end of 2020. The 4.9 percentage point (41 percent) increase
in poverty represents 3.7 million more children in poverty due to the expiration of the monthly Child
Tax Credit payments. Latino and Black children experienced the largest percentage-point increases in
poverty (7.1 percentage points and 5.9 percentage points, respectively).
Figure 1: Trends in Monthly Poverty Rates among Children (Jan 2020–Jan 2022)
Access a version of this table and all related data at: povertycenter.columbia.edu/forecasting-monthly-poverty-data
Between July and December 2021, the Internal Revenue Service (IRS) paid out six months of
advance Child Tax Credit payments worth up to $250 per child aged 6 to 17 and up to $300 per child
aged under 6, reaching over 61 million children in over 36 million households. On its own, the
monthly Child Tax Credit kept 3 million children from poverty in July; by December, it was keeping
3.7 million children from poverty and reducing monthly child poverty by 30 percent. A roundup of
the available research reveals that the monthly Child Tax Credit payments buffered family finances
amidst the continuing pandemic, increased families’ abilities to meet their basic needs, reduced child
poverty and food insufficiency, and had no discernable negative effects on parental employment.
Monthly child poverty rate spiked in January 2022
The overall monthly child poverty rate rose sharply between December 2021 and January 2022, from
12.1 percent to 17 percent – an increase of 41 percent. This means that 3.7 million more children are
living below the poverty line in January 2022 than they were in December 2021. For the first half of
2021 (before the rollout of the monthly Child Tax Credit), additional forms of COVID-19 economic
relief were available at various points – including stimulus checks, expanded unemployment benefits,
and increased food assistance. After the expiration of the stimulus checks and expanded
unemployment benefits, the new monthly Child Tax Credit payments and increased food assistance
represented the central components of economic relief available to families with children in the
second half of 2021. In June 2021, just prior to the rollout of the new monthly Child Tax Credit, the
child poverty rate was 15.8 percent. By July 2021, there was a sharp drop in the child poverty rate –
from 15.8 percent to 11.9 percent – that accompanied the first payments.
Heading into 2022, the primary form of continuing pandemic economic relief is the Supplemental
Nutrition Assistance Program (SNAP) emergency allotments still in place in most states. This
continuing food assistance kept 1.6 million children from poverty, resulting in a January monthly
poverty rate for children that was 2.2 percentage points, or 11 percent, lower than it would have been
without the remaining SNAP emergency allotments.1 The absence of the monthly Child Tax Credit
payments in January 2022, however, resulted in the highest number of children living below the
poverty line since December 2020.
Monthly poverty also increased between December 2021 and January 2022 for the whole US
population, rising from 12.5 percent to 14.7 percent (an increase of 17 percent). Our detailed set of
monthly poverty results from January 2020 to the present can be found at
povertycenter.columbia.edu/forecasting-monthly-poverty-data.
1
As of October 1, 2021, recipients of SNAP also saw an increase in their SNAP benefits with the new adjustments
to the Thrifty Food Plan; our analysis accounts for these new additional benefits as part of the permanent social
safety net, rather than as part of temporary COVID-19-related relief.
Center on Poverty and Social Policy povertycenter.columbia.edu 2
Table 1: January 2022 Monthly Child Poverty Rates by Children’s Race and Ethnicity
SPM CHILD POVERTY RATE (%)
Children December 2021 January 2022 Percentage Pt. Change Percent Change
All 12.1% 17.0% 4.9 p.p. 41.1%
White 7.5% 11.4% 3.9 p.p. 52.3%
Black 19.5% 25.4% 5.9 p.p. 30.4%
Latino 16.8% 23.9% 7.1 p.p. 42.5%
Asian 11.9% 15.1% 3.2 p.p 26.9%
NUMBER IN POVERTY
Children December 2021 January 2022 Increase
All 8,912,000 12,574,000 3,662,000
White 2,750,000 4,189,000 1,438,000
Black 2,175,000 2,837,000 662,000
Latino 3,165,000 4,509,000 1,344,000
Asian 519,000 659,000 140,000
Parolin, Collyer, and Curran (2022), Center on Poverty and Social Policy at Columbia University, Monthly SPM
Poverty for January 2022. *Numbers rounded to the nearest thousand.
Table 1 breaks down the changes in child poverty between December 2021 and January 2022 by race
and ethnicity. One in four Black children in the US lived with a monthly income below the monthly
poverty line in January 2022, an increase of more than 600,000 Black children from the month prior
(a 30 percent rise). Latino children experienced the largest percentage point increase, seeing a 7.1
percentage point (43 percent) increase in child poverty from December 2021 to January 2022; this
increase amounted to over 1.3 million additional Latino children in poverty in January 2022
compared to December 2021. Asian children experienced a 27 percent rise in their child poverty rate.
The potential impact of the second half of the Child Tax Credit on monthly child poverty in 2022
Congress has not currently acted to extend monthly Child Tax Credit payments into 2022.2 However,
families are still due to receive the balance of their 2021 Child Tax Credit at tax-time. The six months
of monthly payments were considered an advance of half the value of the annual credit; because the
payments began mid-2021 the remaining half of the credit will be paid to families when they file a
federal return in early 2022. This could be a maximum of $1,800 per child under the age of 6 or a
maximum of $1,500 per child aged 6 to 17, depending on family income.
In a monthly poverty framework, monthly poverty rates often decline during the tax season, when
families file for and receive their annual tax refunds – including important tax credit payments such
as the Earned Income Tax Credit (and pre-2021, the annual value of the Child Tax Credit). Because
these funds are delivered in one-time, lump-sum payments, they contribute to large reductions in
poverty in the months they are delivered (see Parolin, Curran, Matsudaira, Waldfogel, and Wimer
2022 for more on methods). You can see the impacts of annual tax refunds in the March poverty rates
for 2020 and 2021, which had the lowest poverty rates of any month in those years (Figure 1).
2
A continuation of the expanded Child Tax Credit and its monthly delivery schedule is part of the proposed Build
Back Better package, a version of which was passed by the US House of Representatives in November 2021.
Center on Poverty and Social Policy povertycenter.columbia.edu 3
Over the next few months, as we enter the 2022 tax season, monthly poverty rates will be impacted
by the receipt of annual tax refunds – in particular, the delivery of the second half of the 2021
expanded Child Tax Credit because it will be a larger lump sum overall for many families than in
prior years and millions of families are also newly eligible. The delivery of the second half of the
Child Tax Credit is likely to result in substantial, but temporary, dips in monthly child poverty rates
for children in February, March, and April 2022. Following the conclusion of tax season, however, it
is likely that monthly child poverty rates could be persistently high through the rest of 2022 absent
the continuation of an expanded Child Tax Credit, further policy interventions, or strong
improvements in labor market outcomes.
Methods
In 2020, we established a novel method of forecasting poverty to provide monthly projections of
poverty using the Supplemental Poverty Measure (Parolin, Curran, Matsudaira, Waldfogel, and
Wimer, 2020). Using a monthly framework, we are able to track poverty amid changing economic
circumstances as the COVID-19 pandemic and federal policy responses continue to unfold. Our
monthly poverty estimates for the US population, including by race/ethnicity and age groups, will be
regularly updated at: povertycenter.columbia.edu/forecasting-monthly-poverty-data.
Our monthly poverty framework estimates monthly child poverty rates based on the income a family
unit (as defined by the Supplemental Poverty Measure) receives in a given month. Other estimates of
the poverty reduction effect of the CTC focus almost exclusively focus on annual poverty rates (see
Acs and Werner, 2021; Parolin, Collyer, Curran, and Wimer, 2021; Wheaton, Minton, Giannarelli,
and Dwyer, 2021; Marr, Cox, Hingtgen, and Windham, 2021). In the annual framework, estimates
(including our own past annual poverty estimates estimating a Child Tax Credit expansion on its
own, or as part of the broader American Rescue Plan) generally assume 100 percent coverage among
eligible family tax units; the assumption of perfect coverage matches the US Census Bureau’s
approach when estimating annual poverty rates in the CPS ASEC. Our analysis of monthly poverty
rates, in contrast, does not assume perfect coverage of the Child Tax Credit. In an annual poverty
framework, many families in 2021 would also receive benefits from the Earned Income Tax Credit
(EITC), stimulus checks (also known as Economic Impact Payments), unemployment benefits, and
other transfers (including food and housing assistance and more) that lift families closer to the
poverty line. As a result, the effect of the Child Tax Credit often appears stronger when examined in
conjunction with these other income transfers. Our focus on monthly poverty may, in most months,
understate the poverty reduction effect of the CTC compared to its effect on annual poverty. For full
methodological details on our framework for measuring monthly poverty rates, please see Parolin,
Curran, Matsudaira, Waldfogel, and Wimer 2022.
Center on Poverty and Social Policy povertycenter.columbia.edu 4
References
Parolin, Zachary, Megan A. Curran, Jordan Matsudaira, Jane Waldfogel, and Christopher Wimer.
2022. “Estimating Monthly Poverty Rates in the United States.” Poverty and Social Policy
Discussion Paper. New York, NY: Center on Poverty and Social Policy.
www.povertycenter.columbia.edu/publication/estimating-monthly-poverty
Acs, Gregory and Kevin Werner. 2021. “How a Permanent Expansion of the Child Tax Credit Could
Affect Poverty.” Urban Institute. Accessed at
www.urban.org/research/publication/howpermanent-expansion-child-tax-credit-could-affect-poverty
Marr, Chuck, Kris Cox, Stephanie Hingtgen, and Katie Windham. (2021). “Congress Should Adopt
American Families Plan’s Permanent Expansions of Child Tax Credit and EITC, Make Additional
Provisions Permanent.” Center on Budget and Policy Priorities. Accessed at
www.cbpp.org/research/federal-tax/congress-should-adopt-american-families-plans-permanent-expan
sions-of-child
Parolin, Zachary, Sophie Collyer, Megan A. Curran, and Christopher Wimer. 2021.“Monthly Poverty
Rates among Children after Expansion of the Child Tax Credit.” Poverty and Social Policy Brief.
Center on Poverty and Social Policy, Columbia University. Vol. 5, no. 4.
www.povertycenter.columbia.edu/news-internal/monthly-poverty-july-2021
Wheaton, Laura, Sarah Minton, Linda Giannarelli, and Kelly Dwyer. 2021. “2021 Poverty
Projections: Assessing Four American Rescue Plan Policies.” Washington DC: Urban Institute.
www.urban.org/research/publication/2021-poverty-projections-assessing-four-american-rescue-plan-
policies
Suggested Citation
Parolin, Zachary, Sophie Collyer, and Megan A. Curran. 2022. “Absence of Monthly Child Tax
Credit Leads to 3.7 Million More Children in Poverty in January 2022.” Poverty and Social Policy
Brief Vol 6., no. 2. Center on Poverty and Social Policy, Columbia University. Access at:
www.povertycenter.columbia.edu/publication/monthly-poverty-january-2022
Acknowledgments
This policy brief is made possible with the support of the Bill & Melinda Gates Foundation, The JPB
Foundation, the Annie E. Casey Foundation, and Charles and Lynn Schusterman Family
Philanthropies.
The Center on Poverty and Social Policy at the Columbia School of Social Work produces cutting-edge research to
advance our understanding of poverty and the role of social policy in reducing poverty and promoting opportunity,
economic security, and individual and family-wellbeing. The center’s work focuses on poverty and social policy
issues in New York City and the United States. For the center’s latest work and policy briefs, visit us at
povertycenter.columbia.edu. Email us at cpsp@columbia.edu. Follow us @cpsppoverty.
Center on Poverty and Social Policy povertycenter.columbia.edu 5
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