Expanded Child Tax Credit Leads to Further Decline in Child Poverty Rates in August 2021

The second monthly payment of the expanded Child Tax Credit (CTC) lifted 3.5 million children out of poverty in August 2021. The child poverty rate declined from 11.9 percent in July 2021 (the month featuring the first CTC payment) to 11.5 percent in August 2021. Without the CTC, the monthly child poverty rate in August 2021 would have been 16.2 percent. The CTC contributed to a 4.7 percentage point (29 percent) reduction in child poverty compared to what the monthly poverty rate in August would have been in its absence. Estimates are also available by children’s race and ethnicity.

In prior work, we found the first CTC payment kept 3 million children from poverty in July 2021. An additional 500,000 children were lifted from poverty between July and August 2021 upon arrival of the second payment. The US Department of Treasury reports the second CTC payment reached 60.9 million children, a 1.6 million increase from the 59.3 million children reached by the first payment. Our monthly poverty estimates account for this increased access, as well as the adjusted levels of monthly CTC benefits for the new recipient children who had missed the July payment.

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Measuring Monthly Poverty

In 2020, we established a novel method of forecasting poverty to provide monthly projections of poverty using the Supplemental Poverty Measure. Using a monthly framework, we are able to track poverty amidst changing economic circumstances as the COVID-19 pandemic and federal policy responses continue to unfold. Visit our data page to see monthly poverty trends for the US population as a whole, as well as by race/ethnicity and age groups.