The Effects of the 2021 Child Tax Credit on Housing Affordability and the Living Arrangements of Families With Low Incomes

Abstract

Access to safe and stable housing is important for child and adult wellbeing. Yet many low-income households face severe challenges in maintaining stable housing. In this article, we examine the impact of the 2021 temporary expansion to the Child Tax Credit (CTC) on housing affordability and the living arrangements of fami lies with low incomes. We employ a parameterized difference-in-differences method and lever age national data from a sam ple of par ents who are receiv ing or recently received Supplemental Nutrition Assistance Program benefits (N = ∼20,500), many of whom became newly eligible for the CTC. We find that the monthly CTC reduced parents’ past-due rent/mort gages (both amounts and inci dence) and their reports of potential moves due to di f iculties affording rent/mortgages. The CTC increased the likelihood that parents reported a change in their liv ing arrangements and reduced their household size, both effects driven by fewer mothers living with a partner (and not a reduction in doubling up). We find some differences in effects by race and ethnicity and earnings. Our findings illustrate that the monthly credit improved low-income parents’ ability to afford housing, gain residential independence from partners, and reduce the number of people residing in their household.