Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/278935 
Year of Publication: 
2023
Series/Report no.: 
IZA Discussion Papers No. 16237
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Mental health conditions have worsened in many countries in recent decades. The provision of unconditional cash transfers may be one effective policy strategy for improving mental health, but causal evidence on their efficacy is rare in high-income countries. This study investigates the mental health consequences of the 2021 Child Tax Credit (CTC) expansion, which temporarily provided unconditional and monthly cash support to most families with children in the United States (US). Using data from the Behavioral Risk Factor Surveillance System, the largest health-related survey in the US, we exploit differences in CTC benefit levels for households with younger versus older children. More generous CTC transfers are associated with a decrease in the number of reported bad mental health days. The effect materializes after the third monthly payment and disappears when the benefits are withdrawn. The CTC's improvement of mental health is larger for more credit-constrained individuals, including low-income households, women, and younger respondents.
Subjects: 
child tax credit
mental health
public policy
JEL: 
H51
I18
J18
Document Type: 
Working Paper

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