In July 2021, monthly payments from the newly expanded Child Tax Credit (CTC) started hitting families’ bank accounts. The American Rescue Plan (ARP) dramatically increased the value of the CTC, from $2,000 per child to up to $3,600 per child under six and $3,000 per child six and older. The ARP also expanded the CTC so that it is now fully refundable and previously ineligible low-income families will receive the full credit. Half of the expanded CTC will be distributed via monthly payments, helping families meet their financial needs in real time. The first round of monthly payments distributed nearly $15 billion to families across the United States, averaging $423 per qualifying family and reaching more than 59 million children.

Economic indicators show that the labor market is experiencing a period of rising wages and more job choices for workers as Americans continue to recover from the economic effects of the COVID-19 pandemic. Research indicates that the scale of the impact of government programs like Unemployment Insurance (UI) on the timing of workers’ return to work is small to negligible. Real-time evidence and broad academic consensus suggest that the labor market is returning to its pre-pandemic tightness, countering claims by proponents of a “labor shortage.” Before the pandemic, wages were rising and workers had more choices for jobs that fit their skills and needs as the labor market tightened.