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New Survey Data Raises Questions About the Expanded Child Tax Credit — Angela Rachidi, AEI (October 18, 2021)

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New Survey Data Raises Questions About The Expanded Child Tax Credit
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New Survey Data Raises Questions About The Expanded Child Tax Credit

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An AEIdeas blog post published by the American Enterprise Institute on October 18, 2021, written by senior fellow Angela Rachidi, reporting results of an AEI longitudinal survey on the monthly Child Tax Credit payments that started in July 2021. The post states that 62 percent of parents in the sample reported receiving the expanded payment and that lower-income households were more likely to spend it. It reports that more than 10 percent of respondents said the payments affected their employment, and that support for making the expansion permanent reached a majority only among self-described liberals. The author concludes that the payments are not well targeted and that most adults do not support making the expansion permanent. A survey note says the third wave, conducted through NORC at the University of Chicago, totaled 2,701 respondents.

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“New Survey Data Raises Questions About the Expanded Child Tax Credit — Angela Rachidi, AEI (October 18, 2021).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/new-survey-data-raises-questions-about-the-expanded-child-tax-credit/, SHA-256 d7f65c850f52249ef39226935d8c8430c49c9b4d429f950a6011e895d013ffe2.

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6/28/26, 8:29 AM                             New Survey Data Raises Questions About the Expanded Child Tax Credit | American Enterprise Institute - AEI




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    New Survey Data Raises
    Questions About the Expanded
    Child Tax Credit




            by Angela Rachidi
            Senior Fellow and Rowe Scholar
https://www.aei.org/opportunity-social-mobility/new-survey-data-raises-questions-about-the-expanded-child-tax-credit/                                     1/11
6/28/26, 8:29 AM                             New Survey Data Raises Questions About the Expanded Child Tax Credit | American Enterprise Institute - AEI

            October 18, 2021
            Post | AEIdeas
            Opportunity and Social Mobility

    The American Enterprise Institute has been conducting a longitudinal
    survey since July 2020 tracking changes to the employment, social safety
    net, and family situations of a nationally representative group of working-
    age adults throughout the pandemic. In September 2021, we asked
    respondents questions about the new monthly Child Tax Credit (CTC)
    payments that started in July 2021. Congress originally passed the new
    payments as a temporary measure through the American Rescue Plan Act,
    but they are considering making these permanent through the budget
    reconciliation process.
    Who Received the Expanded (CTC) and How Did They Use It?
    Overall, 62 percent of parents in our sample (n=1,434) reported receiving
    the expanded CTC payment, below the roughly 80 percent of households
    with children who were eligible for the expanded payments. (The full
    payment is available to married-couple households with children earning
    under $150,000 and single parent households bringing in less than
    $75,000). Less than half of these respondents said they mostly spent their
    payments, although another 20 percent reported using it to pay down
    debt. Parents in lower-income households were more likely to spend their
    CTC payments, while higher-income households were more likely to save
    the money.




https://www.aei.org/opportunity-social-mobility/new-survey-data-raises-questions-about-the-expanded-child-tax-credit/                                     2/11
6/28/26, 8:29 AM                             New Survey Data Raises Questions About the Expanded Child Tax Credit | American Enterprise Institute - AEI




    We also asked about the importance of CTC payments in meeting day-to-
    day expenses. Unsurprisingly, the payments were less important for
    households with higher incomes than they were for lower-income
    households. Two-thirds of households with annual incomes above
    $100,000 said the payments were not at all or not very important.




https://www.aei.org/opportunity-social-mobility/new-survey-data-raises-questions-about-the-expanded-child-tax-credit/                                     3/11
6/28/26, 8:29 AM                             New Survey Data Raises Questions About the Expanded Child Tax Credit | American Enterprise Institute - AEI




    Did the Expanded CTC Payments Affect Employment? We would not
    necessarily expect to see households changing their employment
    situations due to the new CTC payments in such a short time, mainly
    because the payments are currently temporary. But the possibility of long-
    term effects remains if the CTC expansion becomes permanent. Still, we
    can foreshadow how families might change their employment in the long
    run by asking about their short-term changes. Our survey results show
    that some parents changed their employment because of the CTC
    payments. Even though the vast majority of parents said the new
    payments have not affected their employment (or the employment of
    someone else in their household), more than 10 percent of respondents
    reported that it did, with some reporting that it helped them work more
    and others reporting it helped them work less.
https://www.aei.org/opportunity-social-mobility/new-survey-data-raises-questions-about-the-expanded-child-tax-credit/                                     4/11
6/28/26, 8:29 AM                             New Survey Data Raises Questions About the Expanded Child Tax Credit | American Enterprise Institute - AEI




    Perceptions more broadly about the relationship between the CTC
    payments and employment are also important to understand. We asked all
    respondents (whether they were parents or not) how concerned or
    unconcerned they are that the expanded CTC payments will keep people
    from working. A slight majority expressed being somewhat or very
    concerned, including a majority of self-identified moderates and a large
    majority of conservatives.




https://www.aei.org/opportunity-social-mobility/new-survey-data-raises-questions-about-the-expanded-child-tax-credit/                                     5/11
6/28/26, 8:29 AM                             New Survey Data Raises Questions About the Expanded Child Tax Credit | American Enterprise Institute - AEI




    How Many People Support Making the CTC Expansion Permanent?
    Support for making the CTC expansion permanent was relatively weak
    among working-age adults in our survey. The policy received majority
    support only among self-described liberals or those identifying as
    somewhat liberal. Even among moderate Democrats, only 52 percent
    supported making the CTC expansion permanent. When interpreting the
    chart below, it important to note that the majority of working-age adults
    in our survey identified their political ideology as “moderate” — 51 percent
    of the sample compared to 22 percent who identified as very or somewhat
    liberal. Only 43 percent of the moderate group supported making the CTC
    expansion permanent. This suggests that a permanent CTC expansion
    lacks broad political appeal.



https://www.aei.org/opportunity-social-mobility/new-survey-data-raises-questions-about-the-expanded-child-tax-credit/                                     6/11
6/28/26, 8:29 AM                             New Survey Data Raises Questions About the Expanded Child Tax Credit | American Enterprise Institute - AEI




    Summing It Up
    Democrats are currently considering whether to extend the CTC
    expansion for another few years with the ultimate hope of making the
    expanded Child Tax Credit a fixture of US family policy. If the goal of the
    expanded CTC payments is to help families cover childrearing expenses,
    our survey results suggest they are not well targeted because a sizeable
    share of families reported that they saved the payments or that the
    payments were not that important in meeting their day-to-day expenses.
    The results also show that most adults do not support making the CTC
    expansion permanent, and many have concerns that the payments will
    keep people from working.
    Survey details: The American Enterprise Institute through NORC at the
    University of Chicago has conducted three waves of the Employment and Safety
    Net survey. The first wave was completed in July 2020, with follow-up surveys
    in February/March 2021 and September 2021. The sample completing the third
https://www.aei.org/opportunity-social-mobility/new-survey-data-raises-questions-about-the-expanded-child-tax-credit/                                     7/11
6/28/26, 8:29 AM                             New Survey Data Raises Questions About the Expanded Child Tax Credit | American Enterprise Institute - AEI

    wave totaled 2,701 respondents (from the original 3,508), including 1,489
    parents from the baseline survey.

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                                                                   Related
                                        POST                                                                             POST



https://www.aei.org/opportunity-social-mobility/new-survey-data-raises-questions-about-the-expanded-child-tax-credit/                                     8/11
6/28/26, 8:29 AM                             New Survey Data Raises Questions About the Expanded Child Tax Credit | American Enterprise Institute - AEI

                                     AEIdeas                                                                            AEIdeas
            We Need Safety Net                                                                     How Do We Make
            Policies That Make                                                                     Sense of the New
                 Work Pay                                                                          Poverty Data for
                                                                                                        2020?
         If expanding the CTC was the only way to                                            The Official Poverty Measure suggests an
        reduce child poverty, policymakers might be                                           increase in poverty from 2019 to 2020,
        correct to accept reduced employment levels                                             while poverty rates according to the
          as a consequence. But other policies exist                                         Supplemental Poverty Measure decreased.
           that we know can reduce child poverty                                            Government benefits distributed during the
         without the negative employment effects.                                                 pandemic explain this apparent
                                                                                                           inconsistency.
                   BY ANGELA RACHIDI ON 19 JUL 21                                                    BY ANGELA RACHIDI ON 15 SEP 21




https://www.aei.org/opportunity-social-mobility/new-survey-data-raises-questions-about-the-expanded-child-tax-credit/                                     9/11
6/28/26, 8:29 AM                             New Survey Data Raises Questions About the Expanded Child Tax Credit | American Enterprise Institute - AEI




                                        POST


                                     AEIdeas
            New Poverty Data
           Show the Safety Net
           Warded off Hardship
           Before the American
           Rescue Plan Became
                   Law
           Despite the significant improvements in
           employment and poverty rates made by
          early 2021, President Biden and Congress
          still passed the American Rescue Plan Act,
         adding billions more in spending to address
                   pandemic-related hardship.
                   BY ANGELA RACHIDI ON 5 OCT 21




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6/28/26, 8:29 AM                             New Survey Data Raises Questions About the Expanded Child Tax Credit | American Enterprise Institute - AEI

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