Daniel J. Perez-Lopez (U.S. Census Bureau), Economic Hardship Declined in Households With Children as Child Tax Credit Payments Arrived (2021)

Summary

A U.S. Census Bureau story by Daniel J. Perez-Lopez, dated August 11, 2021, reporting Household Pulse Survey results collected just before and just after the first Advance Child Tax Credit checks arrived. It says the Internal Revenue Service began issuing the monthly credit on July 15, that about 35 million eligible families received a first payment of up to $300 for each child age 5 and under and up to $250 for each child ages 6 to 17, and that payments continue monthly through December. Households with children, which are more likely to report food insufficiency, showed a 3 percentage point decline in food insufficiency between the two surveys, and fewer reported trouble paying household expenses. A note says content on school-related expenses was removed because of a data error.

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“Daniel J. Perez-Lopez (U.S. Census Bureau), Economic Hardship Declined in Households With Children as Child Tax Credit Payments Arrived (2021).” Original at www.census.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/daniel-j-perez-lopez-u-s-census-bureau-economic-hardship-declined-in-h-e68ec784be/, SHA-256 50e3d68d033cf75a39139d70566ab7727781f3c72b9390371dc0a5d8c1c2920d.

Full text

United States Census Bureau | An official website of the United States Government

Economic
Hardship
Declined in
Household
s With
Children as
Child Tax
Credit
Payments
Arrived
Household Pulse Survey Collected
Responses Just Before and Just After the
Arrival of the First CTC Checks

August 11, 2021
Written by: Daniel J. Perez-Lopez

This story was updated at 5:15 EST. Some of the content on school-related
expenses was removed due to a data error.

A drop in the number of households with children that reported food insufficiency
and trouble paying household expenses may be linked to the child tax credit checks
issued last month, according to new Household Pulse Survey
[https://www.census.gov/programs-surveys/household-pulse-survey.html]
(HPS) results.
The Internal Revenue Service last month (July 15) began issuing a monthly
Advance Child Tax Credit (CTC) to families with children. About 35 million eligible
families
[https://www.irs.gov/newsroom/irs-monthly-child-tax-credit-payments-begin]
received the first monthly payment of up to $300 for each child age 5 and under
and up to $250 for each child ages 6 to 17. Payments will continue monthly through
December.

Even though adults in households with children are more likely to experience food
insufficiency, those households saw a 3 percentage point decline between the
surveys conducted before and after the CTC payments.

The U.S. Census Bureau’s experimental HPS collected survey responses just before
and just after the arrival of the first checks.
The survey shows introduction of the CTC coincided with a drop in food
insufficiency in households with children. It also showed that in those households,
there was a drop in difficulty paying weekly expenses.
Several changes were made to the child tax credit as part of the American Rescue
Plan
[https://www.congress.gov/bill/117th-congress/house-bill/1319/text]
, signed in March 2021.
The program provides the tax credit to all families with children, including those
who are not required to file a federal tax return.
In addition, the credit was increased
[https://www.irs.gov/credits-deductions/2021-child-tax-credit-and-advance-child-tax-credit-payments-topic-c-
calculation-of-the-2021-child-tax-credit]
— up to $3,600 per year for children ages 5 and under at the end of this year on a
sliding scale based on income; and up to $3,000 a year for those ages 6 to 17. Half
of the annual credit amount is being paid out in advance in monthly checks that
began on July 15.

Food Insufficiency Dropped Quickly After
Checks Arrived
Although HPS data show an overall decline in the share of adults in households
experiencing food insufficiency (sometimes or often not having enough to eat), the
drop was largely driven by adults in households with children.
Even though adults in households with children are more likely to experience food
insufficiency, those households saw a 3 percentage point decline between the
surveys conducted before and after the CTC payments.
Adults in households without children did not see a change in food insufficiency
during the same period.
[https://www.census.gov/content/dam/Census/library/stories/2021/08/economic-
hardship-declined-in-households-with-children-as-child-tax-credit-payments-arrived-
figure-1.jpg]

Financial Hardship of Families With Children
Also Dropped
The HPS asks respondents how difficult it was to pay their usual household
expenses in the previous week. Adults in households with children were more likely
to say that it was somewhat difficult or very difficult in both time periods.
However, when we compare households with children before and after the arrival of
the CTC payments, we see a decline in the share of adults in households struggling
to pay expenses.
In contrast, the share of adults in households without children that had difficulty
paying expenses increased slightly during this period.
[https://www.census.gov/content/dam/Census/library/stories/2021/08/economic-
hardship-declined-in-households-with-children-as-child-tax-credit-payments-arrived-
figure-2.jpg]

How Families Spent Their CTC
Many HPS respondents reported spending their CTC payments on more than one
thing. About 47% reported spending it on food.
Nearly 10% of adults in households that received the CTC — and 17% of those with
at least one child under age 5 — spent their CTC on child care.

About HPS
The HPS is designed to provide near real-time data on how the pandemic has
affected people’s lives. Information on the methodology and reliability of these
estimates can be found in the source and accuracy statements
[https://www.census.gov/programs-surveys/household-pulse-survey/technical-documentation.html]
for each data release.
Data users interested in state-level sample sizes, the number of respondents,
weighted response rates and occupied housing unit coverage ratios, can consult
the quality measures file available at the same location.
The data were collected from July 21-August 2 during week 34 of the survey. The
Census Bureau sent invitations to 1,042,642 households and received a total of
64,562 responses, for a weighted response rate of 6.1%.

Daniel J. Perez-Lopez is a statistician in the Census Bureau’s Social, Economic
and Housing Statistics Division.
This article was filed under:

Data Services Families and Households Population Public Assistance

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Page Last Revised - April 8, 2024

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