The Impacts of State Child Tax Credits: Evidence from Oregon and Minnesota

This paper investigates the impact of state-level child tax credits (CTCs) on reducing financial instability, in the form of food insecurity and difficulty in paying household expenses. Using a difference-in-differences approach, regressions are run for two pairs of states, each pair featuring one state that has recently enacted a CTC, Oregon and Minnesota, and one that has not, Washington and Wisconsin. Utilizing survey data from the Census Bureau’s Household Pulse Survey, the two natural experiments are analyzed to gauge the effectiveness of these state-level policies. Results indicate a 45% decline in the likelihood of food insecurity and expense difficulty in Oregon after the beginning of early tax filing in late January. However, the results for Minnesota have no statistical significance, indicating that state-specific conditions can impact the success of CTC policy. Future research into the changing impacts of CTC policy as Oregon and Minnesota move to advance payments of the credit, along with analysis of other state-level CTCs across the U.S., are warranted to further gauge the impacts of this type of policy.