Study Finds Employment Declined for Parents After Ending Monthly CTC Payments

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Households who received the monthly Child Tax Credit in 2021 experienced a dramatic decline in employment after the credit expired, according to a recently-released analysis of Census Bureau data.

The report from the Social Policy Institute at Washington University in St. Louis found that declines in employment in the new year have been sharpest for CTC recipients once the enhanced credit was terminated. Employment of Child Tax Credit recipients dropped from 72.4% to 68.3% after the final monthly payment of the credit in December 2021. 

This equates to approximately 1.4 million CTC-recipient households that may have left jobs due to the end of the monthly child tax credit, a shocking number considering the US nonetheless added 504,000 jobs in January on the net.

Fastest Pace of Annual Inflation in 40 Years

As rising prices continue to strain the finances of American families, this employment data suggests that some expenses like childcare, which enabled parents to work, are no longer affordable for many. The Consumer Price Index rose by 7.9 percent through February according to the Bureau of Labor Statistics, marking the fastest pace of annual inflation in 40 years.

“Many parents can’t work right now because they can’t afford childcare, but they can’t afford childcare because they can’t work,” said Greg Nasif, Director of Public Affairs at Humanity Forward.

“Reverting the Child Tax Credit back to monthly payments could help break this vicious cycle for millions of families and end the decline of employment.”

It’s Up to Congress

This study comes as Congress continues to deliberate the fate of the Child Tax Credit. “It’s up to Congress to reach a compromise that ends this disruption of monthly support for American families,” says Paolo Mastrangelo, Head of Policy & Government Affairs at Humanity Forward. “While the Child Tax Credit still exists, for the majority of families in this environment a lump-sum payment is nowhere near as useful as the monthly payments are – we hope Congress can find a way to fix this.”

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