Left Behind: The One-Third of Children in Families Who Earn Too Little to Get the Full Child Tax Credit — CPSP, May 13, 2019
Summary
Poverty & Social Policy Brief Vol. 3 No. 6, dated May 13, 2019, Left Behind: The One-Third of Children in Families Who Earn Too Little to Get the Full Child Tax Credit, by Sophie Collyer, David Harris and Christopher Wimer of Columbia University's Center on Poverty and Social Policy. The brief states that the current federal Child Tax Credit provides up to $2,000 per child per year but low-income families lose out because their earnings are too low to qualify for the full benefit. It states findings that over 50 percent of Black, non-Hispanic and Hispanic children are left behind, compared to 23 percent of White, non-Hispanic children, and that 70 percent of children in families headed by single parents who are female do not receive the full credit. It also discusses the American Family Act.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
- Issuer
- Source documents
- Document type
- Left Behind The One Third Of Children In Families Who Earn Too Little To Get The Full Chil
Cite this document
“Left Behind: The One-Third of Children in Families Who Earn Too Little to Get the Full Child Tax Credit — CPSP, May 13, 2019.”
Original at d3n8a8pro7vhmx.cloudfront.net. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/left-behind-the-one-third-of-children-in-families-who-earn-too-little-to-get-the-full-child-tax-credit/
, SHA-256 6cac659f13d63fd30f5b1aa940bdd6348eb4098869c575036662bf311b147f1a.Full text
POVERTY & SOCIAL POLICY BRIEF Vol. 3 No. 6 May 13, 2019
Left Behind: The One-Third of Children
in Families Who Earn Too Little to Get the Full Child Tax Credit
Sophie Collyer, CPSP, David Harris, CPSP & CREI, and Christopher Wimer, CPSP
Columbia University, Center on Poverty and Social Policy (CPSP)
Children’s Research and Education Institute (CREI)
Despite significant progress in the fight against child poverty, over 15 percent of children in the
United States remain poor. A recent bipartisan report of the National Academy of Sciences put
forward evidence-based strategies to cut child poverty in half. The report highlights a universal child
allowance as an efficient way to reduce child poverty. Such an allowance could take the form of an
expanded Child Tax Credit. The current federal Child Tax Credit provides up to $2,000 per child per
year to qualifying children, but low-income families lose out because they do not have enough
earnings to qualify for the full benefit. The American Family Act (AFA), introduced by Senators
Michael Bennet and Sherrod Brown and Representatives Rosa DeLauro and Suzan DelBene, would
expand eligibility for the Child Tax Credit to all children in families who currently earn too little to
get the full credit and increase the value of the credit. Even though the AFA enjoys wide support
among Democrats in Congress, there are still proposals that consider continuing to condition CTC
eligibility to earnings.
This brief documents who is currently “left behind” in terms of realizing the full benefits of the federal
Child Tax Credit because of the CTC’s earnings requirement. While two percent of children are in
families who earn too much to get the full CTC, the focus of this brief is on the “left behind,” those
children in families who earn too little to get the full CTC. The results are important for policy makers
considering the implications of a policy design that links eligibility and credit values to earnings.1 We
focus on inequities in CTC receipt by race/ethnicity, family structure, children’s age, and geography.
Who is Left Behind?
Here are some basic facts about children and families: (1) children in groups that face discrimination
and structural disadvantage often have higher rates of poverty,2 (2) single-parent households face
time and financial constraints that are less prevalent in two-parent households,3 (3) the early years
of a child’s life are crucial to healthy development,4 and (4) children in rural areas have access to
fewer services than those in metropolitan areas.5 So it would seem logical that the largest federal
1 While the focus of this brief is on those left behind from the Child Tax Credit, the similar trapezoid-like structure of the EITC and other
tax credits - with eligibility phase-ins that leave the poorest children without full benefits - suggests that they are likely to have a
considerable number of left behind children as well.
2 Fox, L. (2018). The Supplemental Poverty Measure: 2017. Census Bureau; Wilson, V., & Schieder, J. (2018). The rise in child poverty
reveals racial inequality, more than failed War on Poverty. Economic Policy Institute.
3 Nieuwenhuis, R., & Maldonado, L. C. (2018). The triple bind of single-parent families. Policy Press.
4 Waldfogel, J. (2009). What children need. Harvard University Press.
5 DeVoe, J. E., Krois, L., & Stenger, R. (2009). Do children in rural areas still have different access to health care? Results from a statewide
survey of Oregon's food stamp population. The Journal of Rural Health, 25(1), 1-7.
Left Behind: The One-Third of Children in Families Who Earn Too Little to Get the Full Child Tax Credit
expenditure on children should reach children of color, children living with single parents, young
children, and children in rural areas. But this is not the case, as we show below. While over one-in-
three children in the United State do not qualify for the Child Tax Credit because their families earn
too little, rates of ineligibility are even higher among children in these groups (see Figure 1).6 Figure
1 shows the percentage of children by demographic group who are left behind when it comes to
receiving the full current Child Tax Credit of $2,000.
We Find That:
Over 50 percent of Black, non-Hispanic and Hispanic children are left behind,
compared to 23 percent of White, non-Hispanic children; and nearly 1-in-5 Black, non-
Hispanic children do not receive any credit at all.
The overwhelming majority of children of single parents are left out of the credit: 70
percent of children in families headed by single parents who are female do not
receive the full credit, compared to 25 percent of children in two-parent households.
Rates of ineligibility are higher for children in single-parent families headed by females
than those headed by males. This discrepancy is likely, in part, driven by the gender pay
gap. The gender pay gap disadvantages women for any credit or benefit where the amount
received is dependent on earnings, resulting in moms being left out.
The current structure of the Child Tax Credit also disadvantages children in families with
young children (that is, children who are under 6 years old or have siblings who are under
6 years old). Forty percent of children in families with young children are left behind,
compared to 29 percent of children in families where all children are above age 6.
Forty-two percent of children in rural areas are left behind, compared to 34 percent
of children in metropolitan areas.
6 These estimates do not take into account immigration status. TCJA made children without Social Security Numbers ineligible for the
CTC for the first time. If the model took this policy change into account, the estimates of Left Behind children would be even higher.
povertycenter.columbia.edu / Vol. 3 No. 6 / page 2
Left Behind: The One-Third of Children in Families Who Earn Too Little to Get the Full Child Tax Credit
Figure 1. What share of children in different demographic groups receive a partial or no Child
Tax Credit?
1%
0% 0% 1% 1% 1% 1% 1% 0%
0% 1%
1% 0% 1%
0% 0% 0% 1%
1% 1% 1% 1%
29%
High Earnings: No
Credit 46% 49%
56% 59% 57%
64% 63%
High Earnings: 68%
74% 73%
Partial Credit
42%
Full Credit
34%
38%
24% 29%
Low Earnings: 29%
24% 25%
Partial Credit 20%
16% 28% 20%
19% 18%
No/Low Earnings: 12% 11% 10% 13% 10%
7% 9%
No Credit 5%
Given that young children under 6 are disproportionately left out of the Child Tax Credit, we examine
this group in more detail here. Not only is income thought to be more consequential for children’s
development in the early years, but parents with young children often earn less. Figure 2 looks at the
percentage of young children in each demographic category who are left behind, and the results are
striking. Nearly 80 percent of young children in single-parent families headed by females and over
half of young children of color are left behind when it comes to receiving the full credit.
povertycenter.columbia.edu / Vol. 3 No. 6 / page 3
Left Behind: The One-Third of Children in Families Who Earn Too Little to Get the Full Child Tax Credit
Figure 2. What share of young children (<6) in different demographic groups receive a partial
or no Child Tax Credit?
0% 0% 1% 0% 1% 1% 0% 1%
0%
0% 0% 1%
0% 1% 0% 1% 0%
1%
High Earnings:
No Credit 22%
41%
47%
52% 53%
High Earnings:
Partial Credit 63% 61%
74% 72%
45%
Full Credit
37%
39% 29%
32%
Low Earnings:
Partial Credit 25% 26%
17% 33% 21%
21% 19%
No/Low 14% 11% 14% 11%
Earnings: No 7% 5%
Credit
Conclusion
There are roughly 23 million children in the United States who are left behind when it comes to
receiving the full Child Tax Credit because its current structure benefits higher income families.
Those left out are disproportionately children of color, those in families with young children, those
with single parents, and those who reside in rural areas. Our results show that there are substantial
inequities embedded in the structure of the current CTC, and supplemental analyses reveal that
these inequities would persist if the credit was phased in at the first dollar of earnings (see
Appendix A). Adopting a more equitable, fully-refundable Child Tax Credit that is not tied to
earnings would effectively remedy these inequities and meaningfully increase the after-tax incomes
of those who are currently left behind.
Acknowledgements
This brief is made possible with the support of The JPB Foundation and the Annie E. Casey
Foundation. We also thank Sonia Huq for her help with preparing this report.
povertycenter.columbia.edu / Vol. 3 No. 6 / page 4
Left Behind: The One-Third of Children in Families Who Earn Too Little to Get the Full Child Tax Credit
Appendix A. Would beginning to phase the Child Tax Credit in at the first
dollar of earnings ensure that children are not left out of the credit?
Some policy makers argue that instead of guaranteeing the full Child Tax Credit for all children
except those in the highest-income families, the CTC should simply phase in earlier – at the first
dollar of earnings as opposed the first dollar over $2,500. The benefit could also phase in more
quickly at a rate of 45 percent per dollar of earnings instead of the existing phase in rate of 15
percent. It is thought by some that this reform would ensure that nearly all children receive the
CTC. However, we find that with this policy design, the number of children left out of the CTC
remains incredibly high. Continuing to tie eligibility for the CTC to earnings, even in this more
generous way, disproportionally leaves out children of single mothers, children of color, those in
families with young children, and children in rural areas (see Figure A1). These disparities remain
when looking at young children (see Figure A2). In previous work, we have found that expanding
eligibility to the left behinds has an even greater impact on reducing child poverty than increasing
the value of the CTC. Thus, making the credit fully refundable is the key to reducing current
inequities and ensuring that the Child Tax Credit has the largest impact on child poverty.
If the Child Tax Credit were to phase in at the first dollar of earnings:
Fifteen percent of children would be left behind.
One-in-four Black, non-Hispanic children and one-in-five Hispanic children would be left
behind, and nearly one-in-three Black, non-Hispanic children under age six would be
left behind.
Nearly 40 percent of all children and 46 percent of children under age six in single-
headed female households would be left behind.
One-in-five children in living in rural areas would be left behind.
Figure A1. What share of children in different demographic groups receive a partial or no
Child Tax Credit when the CTC is Phased-In at the First Dollar of Earnings?
0% 0% 1% 1% 1% 1% 1% 0% 1%
0% 1%
1%
0% 0% 1% 0%
1% 0% 1% 1% 1% 1%
High Earnings:
No Credit
61%
High Earnings:
Partial Credit 72%
81% 77% 81% 80%
86% 84% 83%
87% 90%
Full Credit
14%
Low Earnings: 11%
Partial Credit 5%
8% 8%
24% 8% 6%
4% 6%
16% 4% 16%
11% 4% 8% 10% 9% 12% 9%
No/Low
No Earnings: 6% 4%
Earnings:
No CreditNo
Credit
povertycenter.columbia.edu / Vol. 3 No. 6 / page 5
Left Behind: The One-Third of Children in Families Who Earn Too Little to Get the Full Child Tax Credit
Figure A2. What share of young children in different demographic groups receive a partial or
no Child Tax Credit when the CTC is Phased-In at the First Dollar of Earnings?
0% 0% 1% 0% 1% 1… 0% 1%
0%
0% 1%
0% 1% 0% 0% 1% 0%
1%
High Earnings:
No Credit
54%
High Earnings:
Partial Credit 68%
80% 77% 78%
Full Credit 83% 82%
88% 90%
Low Earnings:
Partial Credit 18%
No/Low
No Earnings:
Earnings: 14%
No Credit No
Credit 7%
8% 9%
28% 6% 7%
17% 4% 16%
12% 4% 9% 12% 9%
6% 4%
povertycenter.columbia.edu / Vol. 3 No. 6 / page 6
File and source
- File
- left-behind-the-one-third-of-children-in-families-who-earn-too-little-to-get-the-full-child-tax-credit.pdf
- Size
- 1,238,855 bytes
- SHA-256
- 6cac659f13d63fd30f5b1aa940bdd6348eb4098869c575036662bf311b147f1a
- Original
- d3n8a8pro7vhmx.cloudfront.net