The second monthly payment of the expanded Child Tax Credit 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 payment) to 11.5 percent in August 2021. Without the Child Tax Credit, the monthly child poverty rate in August 2021 would have been 16.2 percent. The credit 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 Child Tax Credit 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 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 Child Tax Credit benefits for the new recipient children who had missed the July payment.
Measuring Monthly Poverty
In 2020, we established a novel method of forecasting poverty to provide monthly estimates 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 U.S. population as a whole, as well as by race/ethnicity and age groups. Access monthly data.
Suggested Citation:
Parolin, Zachary, and Megan Curran. 2021. Expanded Child Tax Credit leads to further declines in child poverty in August 2021. Poverty and Social Policy Fact Sheet. New York: Center on Poverty and Social Policy, Columbia University.