Child Trends released a brief on the impact of cash assistance, like the Earned Income Tax Credit and the Child Tax Credit, for families with infants and toddlers that have low incomes. Cash assistance is one way to supplement incomes and address the economic burdens these families face. The brief contained evidence-based conclusions on the impact cash assistance can have in areas like mental and physical health, providing for essential needs, access to childcare, and employment.
Although economic principles say that cash assistance leads to negative labor market participation, data shows that over ⅓ of the Child Tax Credit refund that was spent on essential needs was spent on child care. Child Trends made a few policy recommendations based on their findings like removing administrative barriers to accessing cash assistance, expanding eligibility requirements, increasing the value of assistance, and utilizing cash assistance as an effective anti-poverty measure.
By Maya Benysh, Policy Intern
