The Effects of the 2021 Child Tax Credit on Parents’ Psychological Well-Being

Abstract

Improving the psychological well-being of parents who received the 2021 expanded Child Tax Credit (CTC) was not an explicit focus of that benefit program, but psychological effects may have been felt, given the positive income shocks generated by the credit. This article reviews academic research that is available on the CTC’s effect on parents’ psychological well-being. Some studies have found that the CTC led to reductions in reported levels of clinical depression and anxiety among parents and in their subclinical depressive and anxiety symptoms. Other studies that have used similar methods find no effects on those outcomes. Importantly, the evidence does not point to the CTC worsening psychological well-being. Overall, evidence on this topic is thin and mixed, even when comparable studies on the impact of income support are also included in the review. We argue that building a more conclusive evidence base would require tighter alignment of policy objectives to measurement approaches.