skip to Main Content
MSJ NEWS see latest news

Study Suggests Enhanced Child Tax Credit Incentivizes Parents to Work

  • Survey finds that only 6.4 percent of working parents changed jobs or cut their working hours due to the enhanced child tax credit
  • Parents generally put money toward financial security, family stability and child development
  • Researchers say the extra money helps give families leverage over their child care and work options

Summary by Dirk Langeveld

Nearly all working parents plan to keep working or work more after the debut of the new enhanced child tax credit, according to recent research.

The study, conducted by three universities as well as Humanity Forward and the Urban Institute, surveyed 1,514 parents who were eligible for the credit. The temporary expansion of the child tax credit provides qualifying low- and middle-income families with $3,600 for every child in the household under the age of six and $3,000 for every child between the ages of six and 17. The funds began to be disbursed in July, and are continuing on a monthly basis through the end of the year.

Almost 94 percent of respondents in the study said they plan to keep working or work more hours while receiving the credits. Just 6.4 percent said the credits will encourage them to reduce their working hours or change jobs, and these respondents were more likely to have very young children or a partner in the household.

  • Researchers suggest that the credit is giving families more leverage over their child care options and work decisions
  • Parents are typically planning to use the credits to save for emergencies and college tuition, spend on essentials such as housing and utilities, or purchase more or higher quality essential items for their children such as food and clothing
  • Researchers say families consistently put the funds toward financial security, family stability and child development in ways that support their individual needs, including paying for child care or offsetting a loss of income from reducing work hours to care for a minor
  • About one in five respondents said they were running their own business or plan to start one, raising the idea that the credits might help entrepreneurs in balancing their business and day-to-day expenses
  • A forthcoming study in 2022 will ask the same respondents how the enhanced child tax credit affected their employment, child care, and spending

Spread the Word

More To Explore

Expert Summaries

Know Your Competitors

By Denis Jakuc 

There are tons of benefits to knowing who your competitors are—what they’re offering, their strengths and weaknesses. That knowledge can help you make your products and services stand out,

Latest News

Join with Free InnovatorsLINK Account

Start accessing all the free member benefits and valuable content on the InnovatorsLINK platform. Create a BizLINK listing to boost brand exposure, receive the weekly Main Street Journal newsletter, engage in forums, get full access to free content, and more.