New Data Show That the Child Tax Credit Fueled a Substantial Reduction in Child Poverty

This blogpost illustrates how newly released data from the U.S. Census Bureau reveal a major public policy success. The nation’s child poverty rate dropped by half in 2021, from an estimated 10% in 2020 to a historic low of 5%. This drop was primarily due to the expanded child tax credit (CTC), according to the Supplemental Poverty Measure (SPM). The SPM provides an opportunity to assess the effectiveness of government anti-poverty interventions by accounting for safety net benefits, including the expanded child tax credit as part of the American Rescue Plan Act of 2021. Based on Census Bureau data, the CTC lifted 2.9 million children out of poverty in 2021; one-third of these kids was under age 6.