Labor Supply Effect of Cash Transfer Programs: Empirical Evidence from Child Tax Credit Reform
Social protection programs are important element for the government's welfare policy and their socio-economic implications need to be carefully evaluated. In this paper, we considered the temporary reform of the Child Tax Credit(CTC) program in 2021 that transformed it into a nearly universal program. The quasi-experimental Intent-To-Treat estimator confirms that the change induces no negative responses. To explain the stark behavioral responses within a household, we estimated a structural econometric model of static games between the husband and the wife in a household. We found there to be a significant evidence for the presence of strategic interaction in this intra-household labor supply decisions.