The American Enterprise Institute has been conducting a longitudinal
survey since July 2020 tracking changes to the employment, social safety net,
and family situations of a nationally representative group of working-age
adults throughout the pandemic. In September 2021, we asked respondents questions
about the new monthly Child Tax Credit (CTC) payments that started in July 2021.
Congress originally passed the new payments as a temporary measure through the
American Rescue Plan Act, but they are considering making these permanent
through the budget reconciliation process.

Who Received the
Expanded (CTC) and How Did They Use It?

Overall, 62 percent of parents in our sample (n=1,434)
reported receiving the expanded CTC payment, below the roughly 80 percent of
households with children who were eligible for the expanded payments. (The full
payment is available to married-couple households with children earning under
$150,000 and single parent households bringing in less than $75,000). Less than
half of these respondents said they mostly spent their payments, although
another 20 percent reported using it to pay down debt. Parents in lower-income
households were more likely to spend their CTC payments, while higher-income
households were more likely to save the money.

We also asked about the importance of CTC payments in
meeting day-to-day expenses. Unsurprisingly, the payments were less important
for households with higher incomes than they were for lower-income households. Two-thirds
of households with annual incomes above $100,000 said the payments were not at
all or not very important.

Did the Expanded CTC
Payments Affect Employment? We would not necessarily expect to see
households changing their employment situations due to the new CTC payments in
such a short time, mainly because the payments are currently temporary. But the
possibility of long-term effects remains if the CTC expansion becomes
permanent. Still, we can foreshadow how families might change their employment
in the long run by asking about their short-term changes. Our survey results
show that some parents changed their employment because of the CTC payments.
Even though the vast majority of parents said the new payments have not
affected their employment (or the employment of someone else in their
household), more than 10 percent of respondents reported that it did, with some
reporting that it helped them work more and others reporting it helped them
work less.

Perceptions more broadly about the relationship between the
CTC payments and employment are also important to understand. We asked all
respondents (whether they were parents or not) how concerned or unconcerned they
are that the expanded CTC payments will keep people from working. A slight
majority expressed being somewhat or very concerned, including a majority of
self-identified moderates and a large majority of conservatives.

How Many People
Support Making the CTC Expansion Permanent? Support for making the CTC
expansion permanent was relatively weak among working-age adults in our survey.
The policy received majority support only among self-described liberals or
those identifying as somewhat liberal. Even among moderate Democrats, only 52
percent supported making the CTC expansion permanent. When interpreting the
chart below, it important to note that the majority of working-age adults in
our survey identified their political ideology as “moderate” — 51 percent of
the sample compared to 22 percent who identified as very or somewhat liberal. Only
43 percent of the moderate group supported making the CTC expansion permanent.
This suggests that a permanent CTC expansion lacks broad political appeal.

Summing It Up

Democrats are currently considering whether to extend the
CTC expansion for another few years with the ultimate hope of making the
expanded Child Tax Credit a fixture of US family policy. If the goal of the expanded
CTC payments is to help families cover childrearing expenses, our survey
results suggest they are not well targeted because a sizeable share of families
reported that they saved the payments or that the payments were not that
important in meeting their day-to-day expenses. The results also show that most
adults do not support making the CTC expansion permanent, and many have
concerns that the payments will keep people from working.

Survey details: The American Enterprise Institute through NORC at the University of Chicago has conducted three waves of the Employment and Safety Net survey. The first wave was completed in July 2020, with follow-up surveys in February/March 2021 and September 2021. The sample completing the third wave totaled 2,701 respondents (from the original 3,508), including 1,489 parents from the baseline survey.

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