The COVID-19 pandemic put families in the United States under financial stress. The federal government’s largest response in 2021 was the American Rescue Plan Act, which temporarily expanded the Child Tax Credit (CTC) into a large, unconditional child allowance providing monthly payments to families with children. This study investigates consumption responses to the CTC expansion using anonymized mobile-location data and debit/credit card data that track visits and spending at 1.3 million establishments across U.S. counties. For identification, we exploit variation in the size of households’ income gains due to the CTC across counties in a difference-in-differences framework spanning January 2021–May 2022. Counties benefiting most from the CTC expansion experienced larger increases in visits to child care centers and health- and personal-care establishments; and increased visits to and spending per transaction at grocery and general stores. These findings suggest that the CTC expansion increased household consumption and spending on children.

Consumption responses to an unconditional child allowance in the United States

Parolin, Zachary
;
Giupponi, Giulia;
In corso di stampa

Abstract

The COVID-19 pandemic put families in the United States under financial stress. The federal government’s largest response in 2021 was the American Rescue Plan Act, which temporarily expanded the Child Tax Credit (CTC) into a large, unconditional child allowance providing monthly payments to families with children. This study investigates consumption responses to the CTC expansion using anonymized mobile-location data and debit/credit card data that track visits and spending at 1.3 million establishments across U.S. counties. For identification, we exploit variation in the size of households’ income gains due to the CTC across counties in a difference-in-differences framework spanning January 2021–May 2022. Counties benefiting most from the CTC expansion experienced larger increases in visits to child care centers and health- and personal-care establishments; and increased visits to and spending per transaction at grocery and general stores. These findings suggest that the CTC expansion increased household consumption and spending on children.
In corso di stampa
Parolin, Zachary; Giupponi, Giulia; Lee, Emma K.; Collyer, Sophie
File in questo prodotto:
File Dimensione Formato  
ctc consumption - final manuscript without supplement - nhb - 231216.pdf

non disponibili

Descrizione: article
Tipologia: Documento in Pre-print (Pre-print document)
Licenza: NON PUBBLICO - Accesso privato/ristretto
Dimensione 304.94 kB
Formato Adobe PDF
304.94 kB Adobe PDF   Visualizza/Apri
NHB_Acceptance.pdf

non disponibili

Descrizione: Acceptance letter
Tipologia: Allegato per valutazione Bocconi (Attachment for Bocconi evaluation)
Licenza: NON PUBBLICO - Accesso privato/ristretto
Dimensione 688.69 kB
Formato Adobe PDF
688.69 kB Adobe PDF   Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11565/4061598
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus ND
  • ???jsp.display-item.citation.isi??? ND
social impact