New study blows a hole in Joe Manchin's argument that the revamped child tax credit discourages people from working

A new study challenges Manchin's assertion that the revamped child tax credit keeps people from working.
The analysis found "statistically insignificant impacts" of the credit on job seeking and workforce participation.
Manchin has pushed to attach a work requirement to the revamped child tax credit, frustrating many Democrats.

A new study released Tuesday indicated that the revamped child tax credit hasn't kept people from working, blowing a hole in an argument championed by Sen. Joe Manchin of West Virginia as Democrats grapple with extending the credit as a key part of President Joe Biden's domestic agenda.

The analysis from researchers at the Center on Poverty and Social Policy at Columbia University, Barnard College and Bocconi University found "very small, inconsistently signed, and statistically insignificant impacts of the CTC" on employment and participation and the workforce.

It relied on data from the monthly Current Population Survey from earlier this year as well as the Census Household Pulse surveys that were collected from April 2021 through August 2021, the second month that the child tax credit checks were sent.

Child tax credit employment effects — Analysis of CTC's impact on employment.
Via Center on Poverty and Social Policy at Columbia University

The child tax credit was overhauled in Biden's stimulus law earlier this year. From July to December, families will get a $300 monthly benefit per child age 5 and under, amounting to $3,600 this year. The one-year measure provides $250 each month per kid age 6 and 17, totaling $3,000. Half of the benefit will come as a tax refund next year.

Families with little or no tax burden can also receive the federal cash now, a sharp change from how the credit was originally structured. The latest research challenges Manchin's assertion that federal aid will keep people from seeking work as he argues against the US economy slipping into an "entitlement mentality."

Some experts cautioned against drawing definitive conclusions early in the credit's rollout. Scott Winship, a poverty expert at the right-leaning American Enterprise Institute, wrote in a tweet that "research finds that the labor supply response takes years to fully manifest, not days or months."

A strong majority of Congressional Democrats support making the changes permanent in their safety net package, citing research that it could cut child poverty by up to half and particularly among Black and Latino kids. Early research has indicated that it helped feed 2 million kids in its first month and kept 3 million out of poverty.

But Democrats are running into resistance from Manchin who wants people to work as a condition to receive the credit.

The West Virginia Democrat has been the chief advocate for imposing a work requirement on the expanded child tax credit. He argues the generous federal assistance would keep people from working.

"There's no work requirements whatsoever," he told CNN on September 12. "There's no education requirements whatsoever for better skill sets. Don't you think, if we're going to help the children, that the people should make some effort?"

He doubled down a few days later, telling Insider that "tax credits are based around people that have tax liabilities."

Some Senate Democrats shot back, including Sen. Sherrod Brown of Ohio, one of the architects of the expansion. "I think raising children is work," he told HuffPost.

Read the original article on Business Insider