Open Access Journal Article

The Expanded Child Tax Credit and Educational Attainment in Rural, Majority-Minority Communities

by Ethan Bennett a  and  Mengzhong Zhang b,* orcid
a
Loans Administrator, Erie County Redevelopment Authority, Erie, PA, USA
b
MPA program director, Gannon University, Erie, PA, USA
*
Author to whom correspondence should be addressed.
JEA  2023, 39; 2(4), 39; https://doi.org/10.58567/jea02040003
Received: 5 May 2023 / Accepted: 14 June 2023 / Published Online: 22 June 2023
View Full-Text
Download PDF

Abstract

Despite the status of the United States as one of the world’s economic superpowers, the country is plagued by child poverty. The issue of child poverty is most prominent in rural, majority-minority communities, where years of limited opportunity, often created by systematic oppression, have created a vicious cycle of economic despair. There are a number of policies that have been explored which could limit the effects of child poverty, most notably the Expanded Child Tax Credit (ECTC), which was introduced as part of the American Rescue Plan Act (ARPA) of 2021. This paper uses a combination of qualitative and quantitative methods to thoroughly examine this policy (ECTC) and its potential to both cut child poverty in the short term and increase educational attainment and economic mobility in the long term for recipients. The ECTC program ended in 2022 and only lasted in a short period. By examining the impacts of a similar and long-standing but less accessible and generous program, the Earned Income Tax Credit (EITC), on educational attainment in specific communities we can theorize and determine the significance the Expanded CTC would have. We use EITC program as a proxy of ECTC and reach inference of the long-term impact of ECTC program on children’s education attainment. The result of this research indicates a number of benefits of the Expanded Child Tax Credit, including its potential to cut child poverty and increase educational attainment, its impact on future economic prosperity in rural, majority-minority communities, and the policy’s ability to decrease economic disparities between non-metro and metropolitan areas.

Keywords: Expanded child tax credit; educational attainment; rural; majority-minority communities;
Copyright: © 2023 by Bennett and Zhang. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) (Creative Commons Attribution 4.0 International License). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
Show Figures

Share and Cite

ACS Style
Bennett, E.; Zhang, M. The Expanded Child Tax Credit and Educational Attainment in Rural, Majority-Minority Communities. Journal of Economic Analysis, 2023, 2, 39. https://doi.org/10.58567/jea02040003
AMA Style
Bennett E, Zhang M. The Expanded Child Tax Credit and Educational Attainment in Rural, Majority-Minority Communities. Journal of Economic Analysis; 2023, 2(4):39. https://doi.org/10.58567/jea02040003
Chicago/Turabian Style
Bennett, Ethan; Zhang, Mengzhong 2023. "The Expanded Child Tax Credit and Educational Attainment in Rural, Majority-Minority Communities" Journal of Economic Analysis 2, no.4:39. https://doi.org/10.58567/jea02040003
APA style
Bennett, E., & Zhang, M. (2023). The Expanded Child Tax Credit and Educational Attainment in Rural, Majority-Minority Communities. Journal of Economic Analysis, 2(4), 39. https://doi.org/10.58567/jea02040003

Article Metrics

Article Access Statistics

References

  1. Aizer, A., Eli, S., Ferrie, J., & Lleras-Muney, A. (2016). The long-run impact of cash transfers to poor families. American Economic Review 106, 935-971. https://doi.org/10.1257/aer.20140529
  2. Akabas, S., Snyderman, R., Gladstone, N., & Carothers, A. (2021, August 23). How to sensibly and permanently expand the Child Tax Credit and earned Income Tax Credit. Bipartisan Policy Center. https://bipartisanpolicy.org/report/bpc-ctc-eitc
  3. Akee, R. K. Q., Copeland, W. E., Keeler, G., Angold, A., & Costello, E. J. (2010). Parents' incomes and children's outcomes: A quasi-experiment using transfer payments from casino profits. American Economic Journal: Applied Economics, 2, 86-115. https://doi.org/10.1257/app.2.1.86
  4. Bastian, J., & Michelmore, K. (2018). The long-term impact of the earned income tax credit on children’s education and employment outcomes. Journal of Labor Economics, 36, 1-58. https://doi.org/10.1086/697477
  5. Brooks-Gunn, J., & Duncan, G.J. (1997). The effects of poverty on children. The Future of Children, 7, 55-71. https://www.jstor.org/stable/1602387.
  6. Cusick, J., Hananel, S., Woodcome, T., Oduyeru, L., Gordon, P., Shepherd Director, M., Parshall, J., Rodriguez, L., Campbell, C., Richards, R., Zessoules, D., Ajilore, O., Rapfogel, N., Edmund, M., Graves-Fitzsimmons, G., & Katulis, B. (2019, June 27). Redefining rural America. Center for American Progress. https://www.americanprogress.org/article/redefining-rural-america
  7. Eaton, K. (2022, December 8). Analysis: Millions of rural families miss child tax credit across us. The Daily Yonder. https://dailyyonder.com/analysis-millions-of-families-miss-full-child-tax-credit-in-rural-america/2022/12/06
  8. Engle, P. L., & Black, M. M. (2008, July 25). The effect of poverty on child development and educational outcomes. Annals of the New York Academy of Sciences. https://doi.org/10.1196/annals.1425.023
  9. Ferguson, H., Bovaird, S., & Mueller, M. (2007, October). The impact of poverty on educational outcomes for children. Paediatrics & Child Health, 12, 701 – 706. https://doi.org/10.1093/pch/12.8.701
  10. Gailey, A. (2023). Child tax credit: Here’s what to know for 2023. Bankrate. https://www.bankrate.com/taxes/child-tax-credit-what-to-know
  11. Greenstone, M., Looney, A., Patashnik, J., & Yu, M. (2013, June 26). Thirteen Economic Facts about Social Mobility and the Role of Education. Brookings. https://www.brookings.edu/wp-content/uploads/2016/06/THP_13EconFacts_FINAL.pdf
  12. Hammond, S., & Orr, R. (2021, August 2). Report: Measuring the child tax credit's economic and community impact. Niskanen Center. https://www.niskanencenter.org/report-measuring-the-child-tax-credits-economic-and-community-impact/
  13. Henning-Smith, C. E., Hernandez, A. M., Hardeman, R. R., Ramirez, M. R., & Kozhimannil, K. B. (2019). Rural counties with majority black or indigenous populations suffer the highest rates of premature death in the US. Health affairs, 38, 2019-2026. https://doi.org/10.1377/hlthaff.2019.00847
  14. Jabbari, J., Hamilton, L., Roll, S., & Grinstein-Weiss, M. (2021, September 29). The New Child Tax Credit does more than just cut poverty. Brookings: Washing, DC. https://www.brookings.edu/blog/up-front/2021/09/24/the-new-child-tax-credit-does-more-than-just-cut-poverty
  15. Kolinovsky, S., Nagle, M., & Cathey, L. (2021, July 15). Biden touts expanded child tax credit. ABC news. https://abcnews.go.com/Politics/biden-touts-expanded-child-tax-credit/story?id=78865759
  16. Kronstadt, J. (2008, April 2). Health and Economic Mobility -Urban Institute. The Urban Institute. https://www.urban.org/sites/default/files/publication/31181/1001161-health-and-economic-mobility.pdf
  17. Levin, B. (1995). Educational responses to poverty. Canadian Journal of Education, 20, 211-224. https://doi.org/10.2307/1495278
  18. Lewis, M. (2019). The fifth risk: Undoing democracy. Penguin Books Ltd.
  19. Lyche, C.S. (2010). Taking on the completion challenge: A Literature review on policies to prevent dropout and early school leaving. Organization for Economic Co-operation and Development.
  20. Marema, T. (2021, December 22). When child tax credit expansion dies, rural families will feel it more. The Daily Yonder. https://dailyyonder.com/when-child-tax-credit-expansion-dies-rural-families-will-feel-it-more/2021/12/21
  21. O'Dell, K. (2021, August 4). Redefining rural: What rural prosperity and the geography of newly affluent rural communities tells us about rural development. Economic Innovation Group. https://eig.org/news/redefining-rural-what-rural-prosperity-and-the-geography-of-newly-affluent-rural-communities-tells-us-about-rural-development
  22. Pacyniak, G. (2020). Greening the old new deal: Strengthening Rural Electric Cooperative Supports and Oversight to Combat Climate Change. Missouri Law Review. https://law.missouri.edu/wp-content/uploads/sites/4/2020/12/Greening-the-Old-New-Deal_-Strengthening-Rural-Electric-Cooperati.pdf
  23. Parolin, Z., Ananat, E., Collyer, S. M., Curran, M., & Wimer, C. (2021, September 27). The initial effects of the expanded child tax credit on material hardship. NBER. https://www.nber.org/papers/w29285
  24. Pulliam, C., & Reeves, R. V. (2022, March 9). New Child Tax Credit could slash poverty now and boost social mobility later. Brookings. https://www.brookings.edu/blog/up-front/2021/03/11/new-child-tax-credit-could-slash-poverty-now-and-boost-social-mobility-later
  25. Reinicke, C. (2021). The enhanced child tax credit will continue for 1 more year, per Democrat spending plan. CNBC. https://www.cnbc.com/2021/10/28/enhanced-child-tax-credit-to-continue-for-1-more-year-per-democrats-plan.html
  26. Samuels, M. E., Glover, S., & Probst, J. C. (2002). Minorities in rural America -University of South Carolina. South Carolina Rural Health Research Center. https://www.sc.edu/study/colleges_schools/public_health/research/research_centers /sc_rural_health_research_center/documents/11aminoritiesinruralamerica2002.pdf
  27. Smith, Z. S. (2022, January 25). Giving moms money can boost babies' brain activity, study finds. Forbes. https://www.forbes.com/sites/zacharysmith/2022/01/24/giving-moms-money-can-boost-babies-brain-activity-study-finds/?sh=5586ddbe20c7
  28. Swagel, P. (2021, September 2). The effects of increased funding for the IRS. Congressional Budget Office. https://www.cbo.gov/publication/57444
  29. The White House. (2021). FACT SHEET: The Biden Administration’s Historic Investments To Create Opportunity and Build Wealth in Rural America. https://www.whitehouse.gov/briefing-room/statements-releases/2022/03/01/fact-sheet-the-biden-administrations-historic-investments-to-create-opportunity-and-build-wealth-in-rural-america
  30. Thiede, B. C. (2020, January). Many rural Americans are still "Left behind". Institute for Research on Poverty. https://www.irp.wisc.edu/resource/many-rural-americans-are-still-left-behind
  31. Torstensson, D. (2013, August 29). Beyond the city: Lyndon Johnson's war on poverty in rural America: Journal of policy history. Cambridge Core. https://www.cambridge.org/core/journals/journal-of-policy-history/article/beyond-the-city-lyndon-johnsons-war-on-poverty-in-rural-america/E133725779018FCABB7790114676B8F4
  32. US Census Bureau. (2021, October 8). Small area income and Poverty Estimates (SAIPE) program. Census.gov. https://www.census.gov/programs-surveys/saipe.html
  33. USDA. (2021, February 24). Educational Attainment. USDA ERS -Data Products. https://data.ers.usda.gov/reports.aspx?ID=17829
  34. Wedenoja, L. (2021, July 7). The Expanded Child Tax Credit Looks Like the Earned Income Tax Credit—That’s Great News. Rockefeller Institute of Government. https://rockinst.org/blog/the-expanded-child-tax-credit-looks-like-the-earned-income-tax-credit-thats-great-news