Providing child tax benefits to low-income parents without earnings may not substantially reduce their employment, suggests a new NBER working paper, Child Tax Benefits and Labor Supply: Evidence from California by Jacob Goldin, Tatiana Homonoff, Neel A. Lal, Ithai Lurie, and Katherine Michelmore.
It’s the same stuff with all these programs that have the trapezoid structure (income phase-ins). What the designers of the program are really looking to do is to not spend a lot of money, so the phase-ins move a large group of people (or children) from just below the line to just above the line so everyone can pat their back, they’re not actually interested in
Also actually having evidence that people just want to take care of children breaks the “moral hazard” narrative down which people don’t like