State Child Tax Credits and Family Well‐Being: Early Evidence From Minnesota

Vollständiger Abstract

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ABSTRACT Objective Minnesota's 2023 Child Tax Credit is among the most generous permanent state child credits enacted in the wake of the temporary 2021 federal expansion. This paper provides early quasi‐experimental evidence on whether Minnesota.s 2023 family tax‐credit package, which is a fully refundable Child Tax Credit of up to $1,750 per qualifying child bundled with a redesigned Working Family Credit improved material hardship and mental health outcomes among households most likely to have received it. Methods The analysis uses repeated cross‐sectional data from the Census Household Pulse Survey (HPS) spanning March 2023 through July 2024, restricted to households with incomes below $75,000 and observed work status across Minnesota and 35 comparison states. The main specification is a triple‐difference design exploiting variation across state, parental status, and time with state‐by‐wave, state‐by‐child, wave‐by‐child fixed effects. Identification is assessed using event‐study diagnostics, Rambachan‐Roth sensitivity, and Benjamini‐Hochberg false discovery rate corrections across the outcomes. Results The preferred estimates show a 1.7 percentage point reduction in food insecurity, a 2.7 percentage point reduction in rent hardship, a 2.9 percentage point reduction in housing hardship, and a 7.2 percentage point reduction in mental health indicator among Minnesota households with children following benefits onset. Estimates are directionally stable across comparison pool restrictions and treatment timing variations. Income restriction heterogeneity confirms a dose‐response pattern for housing hardship and mental health, with effects largest among households below $25,000. Finally, sensitivity analysis indicates the estimates are sensitive to moderate violations of parallel trends. Conclusions Minnesota.s 2023 family tax‐credit package is associated with early improvements in food security, housing stability, and mental health among households most likely to receive it, with effects concentrated where the credit was most generous. The findings offer the first quasi‐experimental evidence on permanent, non‐emergency state child credit and provide a methodological template for evaluating the expanding landscape of state child credits.