Effects of the Pandemic-Era Child Tax Credit on Family Hardship and Children’s Psychological Well-Being

• In Event: Tax Credit Payments During the COVID-19 Pandemic: Implications for Family Economic Hardship and Psychological Wellbeing

Abstract

Evidence suggests that the COVD-19 pandemic has affected children’s psychological well-being through multiple channels, including families’ economic circumstances. What has been less well understood is how the unconventional policies deployed during the pandemic – including the expanded Child Tax Credit (CTC) – have affected children’s psychological well-being, via family economic hardship. The CTC is an unconditional cash benefit that was made available to parents as monthly payments in the second half of 2021. Using longitudinal data on a highly policy relevant sample of families, low-wage workers with children aged 3-8, this study will examine four research questions:
1. How did the expanded CTC affect children’s psychological well-being?
2. How did the expanded CTC affect families’ economic circumstances?
3. How do these associations vary by family race/ethnicity and immigrant status?
Method
Individuals were eligible if they worked in an hourly service-industry position in a retail, food service, or hotel business in a Philadelphia, had a child aged 2-7 (when recruited in Fall 2019), and had a mobile phone. Recruitment used venue-based sampling, a technique for producing generalizable samples of hard-to-reach, un-rostered populations.
When first recruited in August-November 2019, participants were asked to complete 30 days of daily surveys about parents’ work and children’s psychological well-being and a one-time survey about household characteristics, parental work, and income. Throughout the pandemic, families were invited to complete additional one-time surveys with data collection occurring during the following time periods: March-April, 2020; May-August, 2020; September-November, 2020; December, 2020-January, 2021; March-May, 2021; June-November, 2021; and January-May, 2022. Response rates have consistently been high (ranging from 60-80% across waves).
All survey questions and answers were sent and received via SMS text message.
We will use descriptive statistics and longitudinal ordered probit regression models, with child psychological well-being variables as the outcomes and CTC receipt, as the predictor variable. We will estimate pooled regressions and subgroup-specific regressions by race/ethnicity, and immigration.
Preliminary findings
Initial findings using data from the two waves collected in 2021, both before and during CTC distribution, revealed that children experienced substantial symptoms of psychological distress during this pandemic. At both waves, parents reported on child behavior over the last two weeks. Across waves, on more than half of the days or nearly every day, 4% of children seemed sad or worried and 11% of children were uncooperative. Simple chi-square tests comparing before and during CTC distribution showed that child psychological distress did not differ across the two time periods. Future analyses will use data from all of the survey waves in order to be able to use longitudinal multi-level models comparing child psychological well-being at different periods before, during and after CTC distributions.
Preliminary analyses using the 2021 waves also showed that families were less likely to be food insecure during the period when the CTC was being disbursed: families were significantly less likely to report worry about running out of food (p < .01) and having actually run out of food (p < .05) in the second half of 2021, compared to the first half.

Authors

• Anna Gassman-Pines, Duke Univeristy
  Presenting Author

• Elizabeth Oltmans Ananat, Barnard College