Census Bureau: Child Tax Credit Alleviating Family Hardship

Although the program has only been in place for a month, Americans are already experiencing the benefits of the Child Tax Credit.

Part of the American Rescue Plan, the program has alleviated a lot of stress with the distribution of the first round of checks, according to a new survey by the U.S. Census Bureau.

What Happened: Almost half of survey respondents reported spending the credit payments on food, easing financial burdens and relaxing food insecurity, according to qualitative data collected between July 21 and Aug. 2.

Why It Matters: America has some of the highest levels of child poverty in comparison with other countries in the developed world, according to the World Economic Forum.

Many economists and scholars argue that ending childhood poverty will pay for itself in economic returns later on and in reduced spending on an assortment of health care and policing services.

Scholars like Samuel Hammond, the director of poverty and welfare policy at the Niskanen Center think tank, said he's impressed by how quickly the Child Tax Credit has helped families.

“It's remarkable that the Census found such a large impact despite the survey occurring after only the first month of (Child Tax Credit) payments,” he wrote in an email.

What Else: The Census survey highlighted how the biggest drops in food insufficiency — from 11.4% to 8.4% — occurred in households with children, with that decline occurring directly after the checks were issued.

Financial hardships also dropped for families with children — from 31.5% to 29% — which was strongly correlated with the Child Tax Credit.

Hammond of the Niskanen Center said he hopes the policy becomes permanent, thereby preventing financial uncertainty from creeping into American lives and ensuring that parents and kids are prevented from the stresses of not being able to meet regular payments.

“The short-run benefits of the (Child Tax Credit) for household budgets are clear,” he wrote, “but in the longer-run we should also expect to see improvements in child health and educational outcomes, which lead to higher earnings in adulthood.”

Photo: Providence Doucet via Unsplash.