Year of Publication
Doctor of Philosophy (PhD)
Business and Economics
Dr. James P. Ziliak
This dissertation consists of three essays understanding how the Child Tax Credit (CTC) affects maternal labor supply, maternal health, and children’s outcomes. The CTC was implemented in 1998 tax year and has been expanded multiple times throughout the past 20 years. Chapter 1 examines the effect of the CTC on the labor supply of single and married mothers using the numerous policy reforms in the credit generosity and eligibility criteria since its inception in 1997. I use variation in the simulated benefits for a nationally representative sample to estimate the labor supply response at the extensive and intensive margins. Using 25 years of data from the Current Population Survey my results suggest that an increase of $1,000 in the average CTC benefit leads to a 1.7 percentage point increase in employment of single mothers and a 35-hour increase in annual work. I find a greater effect when I restrict the sample to single mothers with high school or less education, with the extensive margin elasticity increasing from 0.07 for all single mothers to 0.24 for less-educated single mothers. For married mothers, I find that an additional $1,000 in the average CTC benefit is associated with a 28-hour increase in annual work. The results are robust to an alternative identification strategy using only variation in the maximum credit across time.
In Chapter 2, I evaluate the impact of the CTC on maternal health outcomes. Following the methodology used in Chapter 1, I exploit time-series variation in the average benefits of the CTC across family size. I find a positive relationship between the CTC and smoking among married mothers. For less educated married mothers, I find that an extra $1,000 in the average CTC benefit increases the likelihood of reporting very good or excellent health by 3.4 percentage points, increases the probability of smoking by 3.5 percentage points, and increases obesity rate by 4.8 percentage points. I also find the CTC is associated with an increase in the probability of being a heavy smoker among less educated single mothers. These results provide evidence that smoking is a normal good. There is no positive impact of the CTC on single mothers’ health outcomes. These results imply that potential positive income effect of the CTC is offset by stress from the increases in work among single mothers.
Chapter 3 examines the short-term and long-term impact of CTC exposure on educational and health outcomes of children. I use time-series variation in the maximum CTC as an identifying variation for the short term analysis and average annual maximum CTC between age 0 to 16 for the long term analysis. Reduced-form results suggest that, in the short-term, an increase of $1,000 in the maximum CTC improved children’s math and reading test scores, reduced obesity, reduced externalizing behavioral issues, and increased internalizing behavioral issues. I find these impacts are most pronounced among non-Hispanic white children and non-Hispanic children of other races. I also find that most impacts were driven by children living with married parents. For the long-term, an additional $1,000 of the annual CTC exposure during age 0-16 increased the likelihood of high school graduation or receiving the General Educational Development certificate by 2.3 percentage points, raised the probability of completing college by 8.7 percentage points, and increased the probability of being obese in adulthood by 2.3 percentage points. There is no significant association between CTC exposure during childhood and other adulthood health outcomes such as self-reported health status, high blood pressure, depression, or loss of interest.
Digital Object Identifier (DOI)
This study was supported by the Horowitz Foundation for Social Policy in 2021.
Kang, Hyein, "ESSAYS ON EVALUATING THE EFFECTS OF THE CHILD TAX CREDIT" (2022). Theses and Dissertations--Economics. 61.