This article has been reviewed according to Science X's editorial process and policies. Editors have highlighted the following attributes while ensuring the content's credibility: A temporary expansion to the earned income tax credit improved housing security for young workers who don't have children, a new study shows. The findings from researchers at the University of Michigan and Columbia University have implications for federal and state policymakers looking to reduce hardship for childless workers ages 19 to 24.
The study is published in the National Tax Journal, and a related policy brief summarizes key findings and makes policy recommendations. "Young adults under 24 years old face some of the highest poverty rates of any age group in the U.S. This is a life stage when many people are moving out of their parents' homes and trying to make a living on their own for the first time," said Natasha Pilkauskas, associate director of Poverty Solutions at the University of Michigan.
"Young childless adults are largely excluded from most social safety net programs. This temporary policy extended benefits to this working population for the first time, and our study showed it helped." Pilkauskas, who also is a professor of public policy, co-authored the study and policy brief with Jiwan Lee, a postdoctoral research associate at Brown University's Population Studies and Training Center; Katherine Michelmore, professor at U-M's Ford School of Public Policy; and Christopher Wimer, senior research scientist and director of the Center on Poverty and Social Policy at Columbia University. The standard federal earned income tax credit offers a maximum of $538 to workers without children but excludes working adults under age 25.
This "childless EITC" is available to people ages 25–64 whose earnings are below $15,820. As part of pandemic recovery efforts in March 2021, the federal government expanded the childless EITC for one year. The expansion included: The expansion made about 6.4 million workers ages 19 to 24 newly eligible for the EITC, and 4.3 million of them claimed the credit.
To see what difference the tax credit made for those childless young workers, the researchers analyzed nationally representative survey data from the U.S. The survey asked people about not having enough food to eat, falling behind on rent or mortgage payments and difficulty covering routine household expenses like utilities, car payments and medical bills. The study compared young adults ages 19–24 who became newly eligible for the expanded childless EITC in 2021 to adults ages 25–34 who were eligible for the credit the whole time.
The analysis found the expanded childless EITC reduced the share of young adults who reported being behind on their rent or mortgage payments by almost one-third (29%). Discover the latest in science, tech, and space with over 100,000 subscribers who rely on Phys.org for daily insights. d research that matter—daily or weekly. "The reduction was concentrated in April 2022, when most tax refunds were received, and disappeared after the expansion expired," Wimer said.
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