Study finds monthly child tax credit insulates families from inflation and keeps parents away from predatory lending
WASHINGTON, April 14, 2022 /PRNewswire/ — New Study Finds Monthly Child Tax Credit Dramatically Improved Financial Security For Eligible Families Amid Rising Costs, Even Leading To A Sharp Drop In The Number Of Households Seeking Expensive Financial Services such as predatory payday loans and the sale of blood plasma.
In the study, published with the Brookings Institution’s Global Economy and Development program, researchers from the Social Policy Institute of University of Washington in Saint Louis and Appalachian State University surveyed over 1,200 credit-eligible households and covered a wide range of topics related to family finances, work and health.
“Although the child tax credit still exists, this study demonstrates that monthly payments were much more beneficial to working families than lump sum payments,” said Paolo Mastrangelo, Head of Policy and Government Affairs for Humanity Forward. “As more and more Americans turn to desperate measures to make ends meet, we at Humanity Forward look to Congress to reach an immediate compromise and a bipartisan path that ends this disruption. monthly support for American families.”
70% of parents receiving the monthly credit who were negatively affected by inflation said the monthly payments helped them better manage rising prices. In addition to a sharp drop in reliance on other sources of income like payday loans, CTC-eligible households reported lower credit card debt, better management of household expenses, urgency and a significant drop in evictions.
The report also found important data regarding work and career development, concluding that there were no statistically significant changes in employment between households receiving and not receiving the credit during the monthly payments, and that CTC-eligible households were more likely to start learning new skills than ineligible households.
Households receiving credit were more likely to afford balanced meals with higher fruit and protein intake. This is consistent with previous data from the US Census Bureau, which indicated that hunger in CTC-eligible households decreased by 24% after the first monthly credit payment in July 2021.
Unfortunately, many of these gains are expected to be lost without a return of the monthly child tax credit. A report of from Columbia University The Center on Poverty and Social Policy found that child poverty, which had been reduced by 3.7 million thanks to the Child Tax Credit, increased by 41% after the monthly payments expired.
“Choosing not to extend these [monthly] payments beyond 2021,” the report concludes, “jeopardizes all of these short-term gains while preventing families from reaping the long-term benefits of increased economic security.”
About Humanity Forward
Humanity Forward is a 501(c)(4) nonprofit organization dedicated to finding bipartisan solutions to advance the economic interests of the American people through federal politics. Uniquely positioned as one of the fastest growing altruistic advocacy organizations in the United States, our mission is to advance evidence-based policies designed to strengthen families, generate growth economy and end poverty.
SOURCE Humanity Forward