Introduction

The link between income inequality and population health is well established (Chetty et al., 2016; Chokshi, 2018). Low-income households experience challenges with routine needs (e.g., food, shelter) and are at greater risk for negative health outcomes, compared to more affluent households (Chokshi, 2018). The coronavirus-2019 (COVID-19) pandemic exacerbated these economic and health disparities (Hardy & Logan, 2020); thus, to mitigate this trend, the American Rescue Plan provided financial relief through the expansion of the Child Tax Credit (ECTC) policy (American Rescue Plan Act of 2021, H.R. 1319, 117TH Cong. (2021)). The ECTC presented a novel change in the distribution of tax credit benefits (i.e., monthly payments vs. lump sum) and a more generous eligibility criteria (< $112,500 single-parent households, < $150,000 couples). Eligible low-income families could elect to receive increased, unconditional cash benefits from July to December 2021 (e.g., $250–300/month per child), resulting in ~ 3.7 million fewer children in poverty and reduced food insecurity for many more (Adams et al., 2022; Parolin et al., 2022).

Guaranteed income (GI) policies (like the ECTC) are a form of federal financial assistance to support families experiencing economic disadvantage. GI differs from universal basic income (UBI) in that payments are directed to a specific, eligible population (usually based on an income threshold) (Johnson & Roberto, 2020). Recipients receive cash payments at regular intervals and may elect how the funds are spent (Johnson & Roberto, 2020). The rationale for such policies is to invest in human capital by providing additional income for families to support themselves and accumulate financial savings (Pega et al., 2022). GI policies are an alternative to conventional social assistance programs which have been criticized for their inordinate emphasis on “workfare”—transitioning social assistance recipients to the workforce and restricting working families to precarious, low-paying jobs (Carey & Bell, 2020; Rizvi et al., 2022). The transfer of consistent, unconditional cash payments to financially disadvantaged families is intended to support a fairer distribution of wealth. Through the years, multiple iterations of GI programs have been implemented globally with varied success (Günther, 2020; Gupta et al., 2022). Consistently, GI studies indicate that families primarily use cash benefits to meet household needs including food, medical, and housing expenses (Kabeer et al., 2012). GI benefits extend beyond increased financial security to improvements in mental and social well-being (Gibson et al., 2020; Haushofer & Shapiro, 2016; Samuels & Stavropoulou, 2016). Yet, changes in political leadership and policy priorities often prompt a termination of these programs and disrupt future gains (Günther, 2020).

The ECTC is similar to GI policies, yet unique in that it did not exclusively target low-income households. Families in higher income brackets were also eligible for ECTC benefits. The ECTC’s broad eligibility criteria presented an opportunity to evaluate potentially differential effects of GI on economically diverse households. Moreover, it provided an opportunity to reconsider what constitutes financial need and who should benefit from federal assistance. In line with this, the hidden dimensions of poverty framework (HDOP) calls for a broader conception of poverty (Bray et al., 2020). It suggests that a narrow focus on material deprivation obscures equally potent dimensions of poverty experiences (e.g., disempowerment, social maltreatment) (Bray et al., 2020). Simple income-based measures of poverty, though necessary, may insufficiently capture poverty experiences and shroud more universal experiences with financial constraint. For example, arbitrary poverty thresholds conceal millions of people with incomes marginally above the poverty line who live with perpetually precarious financial circumstances (Shailly Gupta Barnes, 2020). Information on the potentially differential impact of GI policies, like the ECTC, on families both above and below the poverty line is needed. To inform policy decisions on the continuation of the ECTC, this qualitative study evaluated the lived experiences of ECTC recipients across a range of incomes using a HDOP lens.

The purpose of this study was to understand families’ lived experiences during the ECTC and how the additional income impacted their physical and mental health.

Methods

Study Design

This phenomenological qualitative study evaluated the lived experiences of families who received the ECTC. Intensive qualitative interviews elicited participant perspectives on the ECTC’s perceived impact on their family well-being. All study procedures were approved by the university’s institutional review board prior to recruitment of the first participant. We used the Consolidated Criteria for Reporting Qualitative Research (COREQ) reporting guideline to report this study.

Sampling and Recruitment

A subset of parents (n = 40) were recruited from a larger, observational study investigating associations of the ECTC on food security. Participants in the larger study were recruited via electronic medical record data from an academic medical center in the southeastern USA. In brief, parents had to be ≥ 18 years of age, have ≥ 1 child 2–12 years of age, and believe they qualified to receive the full ECTC benefit. For more details on recruitment, see Adams et al. (2022). Parents who completed the baseline survey using REDCap in June/July 2021 were emailed and asked to indicate their willingness to participate in a phone interview. Among parents willing to participate (n = 192), n = 40 were contacted via phone for verbal consent. To capture differences in the perceived impact of the ECTC, participants were purposively sampled based on annual household income, prior to the ECTC, as reported in their baseline survey. Two groups (above [n = 21] and below [n = 19] 200% of the federal poverty line (FPL)) were created for analysis (Fisher, 1992). Equivalent sample sizes between groups were intended; however, a miscalculation in one households’ annual income resulted in the present sample stratification. To reflect the racial demographics of the recruitment area, a racially proportionate sample (%Black = 50, %White = 50) within each income group was purposively selected. Interviews were conducted between October and November 2021, after participants had received ~ 3–4 monthly ECTC payments.

Qualitative Measures

A semi-structured interview guide was developed to address the study’s research questions. Interview questions addressed salient topics of the GI literature (Campbell et al., 2016; Hamilton & Mulvale, 2019; West et al., 2021) including perceived changes in financial security, ECTC spending decision-making, and the financial and socioemotional impacts of the unconditional cash transfers. Additionally, the perceived impacts of the ECTC on food security, medical care seeking, and perceptions about the impending cessation of the ECTC in December 2021 (i.e., post-ECTC) were evaluated. The interview guide was refined through an iterative process of peer debriefing and preliminary interviews until a finalized guide was reached (Kallio et al., 2016).

Qualitative Interviews

Pilot Testing

The lead author conducted preliminary interviews (~ 20 min) with parents (n = 2) not enrolled in the study. Feedback from these interviews was used to strengthen the overall clarity of the interview questions and enhance alignment with the study’s research questions. For example, additional questions were included to evaluate the perceived impact of the ECTC on participant’s broader social network.

Primary Interviews

Prior to the primary interviews, public health researchers (ELA and ERS) participated in a mock interview training facilitated by a qualitative researcher (RD), followed by feedback and debriefing. Authors (ELA and RD) independently engaged in a reflexivity process, which culminated in a written positionality statement. Interviewers (ELA, ERS, RD) conducted interviews (~ 20 min) by phone with consented parents. No interviewers had previous relationships with participants.

Data Analysis

Qualitative Analysis

Interviews were recorded and transcribed using Otter.ai and imported into NVIVO 12 software. To generate themes, inductive analysis was applied using an immersion crystallization approach and constant comparison methodology (Braun & Clarke, 2006; Strauss & Corbin, 1998). Researchers (ELA, PB), guided by the six phases of thematic analysis (Braun & Clarke, 2006), independently coded all transcripts and developed a comprehensive coding guide. Through collaborative discussion, authors (ELA, PB, RD) reached consensus on codes and determined if saturation was reached (Strauss & Corbin, 1998). Utilizing a “code meaning” saturation approach, coders discussed and agreed no new data, themes, or codes had emerged (below FPL: interview 12; above FPL: interview 11) (Fusch & Ness, 2015; Hennink & Kaiser, 2022). Finalized codes for pre-ECTC family well-being were mapped onto the Hidden Dimensions of Poverty (HDOP) conceptual framework (see Table 1) (Bray et al., 2020). Through a “merging of knowledge” methodology, the HDOP framework offered greater insight about the hidden reality of financially constrained livelihoods by identifying several fundamental, interdependent dimensions (Bray et al., 2020). Themes were generated via collaborative discussion (ELA, RD, PB) by identifying similarities and differences within and between groups (Boeije, 2002). Themes were independently reviewed and verified using peer debriefing by three authors (RGW, RD, ELA) to ensure data consistency and integrity. Member checking was not conducted.

Table 1 Hidden dimensions of poverty
Full size table

Results

Demographics are presented in Table 2 and Fig. 1. Notably, some families classified as above or below 200% FPL reported an income to poverty ratio marginally distant from the 200% poverty line. This suggests the financial security of some families was likely similar, irrespective of income classification. Qualitative findings are presented in three sections: (1) pre-ECTC conditions, (2) ECTC perceived impact, and (3) post-ECTC expectations. In section one, similarities and differences between income groups are framed using the HDOP framework. Representative quotes for corresponding themes are presented in Table 3.

Table 2 Demographics of participants by income classification
Full size table
Fig. 1
figure 1

The distribution of interviewed participants by federal ratio of income to poverty. The dashed line indicates the 200% threshold above the poverty line

Full size image
Table 3 Themes with representative quotes
Full size table

Pre-ECTC Conditions

Similarities

Theme: Resilience (HDOP dimension—“struggle and resistance”).

Parents employed creative strategies to solve financial challenges and meet routine needs (e.g., housing, food) prior to receiving the ECTC. Across groups, parents sought additional employment, applied financial budgeting strategies (e.g., financial savings, minimized unnecessary costs), and utilized governmental assistance (e.g., Supplemental Nutrition Assistance Program [SNAP]) and community resources (e.g., friend/family income support, food pantries) to help meet their needs. Additionally, some parents demonstrated a level of persistence and personal sacrifice to overcome financial challenges (e.g., forgoing personal wants/needs).

Differences

Below FPL theme: Families were constrained, yet resilient (HDOP dimensions—“disempowerment”; “suffering in body, mind, and heart”; “insufficient and insecure income”; “material and social deprivation”).

Parents with an income below 200% FPL described difficulty meeting occasional needs (e.g., medical bills, car/housing repairs) and unexpected expenses. Despite determined efforts to meet household basic needs, some parents still described their financial situation as “living paycheck to paycheck.” Persistent income insecurity compelled parents to choose between meeting basic vs. occasional needs (e.g., pay rent vs. medical bills). Insufficient financial resources limited parents’ ability to save for unexpected expenses and resulted in feelings of anxiety and distress.

Above FPL theme: Basic needs met with some financial challenges (HDOP dimensions—“disempowerment”; “suffering in body, mind, and heart”; “insufficient and insecure income”; “material and social deprivation”).

In response to questions about pre-ECTC financial context, most parents with incomes above 200% FPL did not perceive that they experienced financial strain, stress, or anxiety. Interestingly, in later questions some parents described circumstances that could be labeled as financial constraint. For example, basic needs were paid by credit card (e.g., groceries, gas), constrained choices (purchase food vs. gas for travel), and overdue bills. Some parents with incomes marginally above the poverty threshold (i.e., 200% FPL) reported difficulty meeting routine needs (e.g., food, rent) and experienced elevated stress.

ECTC Perceived Impact

Similarities: ECTC Spending and Decision-Making

Theme: Resolved needs and improved or preserved well-being.

Across groups, monthly ECTC payments were primarily spent on household needs and improved family well-being. Parents employed systematic approaches to manage the additional income and maximize its benefits. Household needs (e.g., rent, food, gas) were prioritized, and subsequently, any remaining funds were occasionally used to improve broader aspects of child well-being. Typical child well-being expenses included extracurricular programming costs, back-to-school clothing, counseling services, and family outings. Additionally, some funding was allocated toward improving quality of life (e.g., entertainment, holiday shopping). Most families utilized budget planning and elected to spend ECTC funds on immediate needs. Overall, families managed ECTC payments through thoughtful consideration and thorough planning.

Differences: ECTC Spending and Decision-Making

Below FPL theme: Financial savings and planning.

A greater proportion of families with annual incomes below 200% FPL (below FPL: ~ 50% vs. above FPL: ~ 14%) designated ECTC funds toward savings for future financial needs. Parents were aware that the ECTC payments were limited in duration (i.e., 6 monthly payments) and elected to replenish savings.

Similarities: ECTC Improvements

Theme: Improved personal and financial empowerment.

Parents described the effect of the ECTC in terms of personal and financial empowerment. The consistent, unconditional payments enabled parents to rely on themselves rather than their social networks for their needs. Parents also described a sense of cognitive relief and financial assurance accompanied the ability to meet present and postponed needs (e.g., preventive healthcare, medical bills). Due to increased financial security, parents were able to purchase a greater volume or variety (e.g., higher quality products, fruits and vegetables) of food for the household.

Theme: Improved family relationships.

In addition to meeting needs, ECTC payments empowered families to invest in positive family experiences (e.g., museum visits, restaurants, holiday celebrations). Parents expressed satisfaction at the newfound ability to respond to children’s wants (e.g., personal laptop, clothing, birthday presents). The pairing of increased family time and strengthened ability to meet child needs improved relational dynamics.

Theme: Preference for ECTC benefits.

Although parents expressed gratitude for social service programs, parents recognized the additional benefits of the ECTC due to the unconditional nature of the payments. Parents valued the flexibility which allowed them to meet varying and pressing needs (e.g., utility, childcare, transportation costs) without restrictions on how the money was spent.

Differences: ECTC Improvements

Below FPL theme: Improved personal and financial empowerment.

Improved financial empowerment was more prominent among families with incomes below 200% FPL. Parents utilized the income support to fully stock their food pantries and store additional food. Parents expressed pleasure at the newfound ability to purchase higher quality products (e.g., special milk for their child, fresh produce) for their household.

Post-ECTC Expectations

Similarities: Attitudes Toward ECTC Cessation

Theme: Significant disappointment and financial preparation.

Irrespective of income classification, most parents desired the ECTC to continue into the coming year. Parents reflected on the vast social and financial benefits as a rationale for its maintenance. The impending termination of the ECTC invoked feelings of disappointment and anxiety about the loss of acquired benefits and a return to financial strain. Still, parents employed financial management strategies in preparation. Strategies included plans to reduce current spending, maintain budgeting plans, and increase financial savings. Some families were concerned about how the monthly ECTC benefits would affect their upcoming 2021 income tax return.

Differences: Attitudes Toward ECTC Cessation

Below FPL theme: Significant disappointment and financial preparation.

More families with incomes below 200% FPL indicated plans to maintain current financial management strategies, compared to families with incomes above 200% FPL. Families implemented several strategies (e.g., paid bills in advance, increased savings) in preparation for the loss of ECTC benefits. This immediate financial planning demonstrated proactive thinking and the use of preventive strategies for anticipated income reductions.

Discussion

Main Findings

This study captured parents’ lived experiences prior to and during the monthly ECTC payments. Prior to receiving the ECTC, families displayed remarkable resilience as they employed financial strategies to meet their needs. Most families experienced a degree of financial strain, irrespective of poverty classification. Families with lower incomes had greater difficulty meeting routine needs and experienced emotional distress. Although most families with higher incomes were able to meet basic needs, many still experienced financial constraints. The ECTC payments strengthened families’ existing efforts to meet household needs, supported ongoing financial management strategies, reduced stress, and expanded opportunities to improve child well-being. Given these benefits, policy implications extend to potential disease risk reduction and healthcare cost-savings as families were empowered to engage in holistic health promoting activities.

What is Known

Research has consistently demonstrated an association between poverty and health (Chetty et al., 2016; Chokshi, 2018). Given the persistent disparities in health outcomes by class and income (Barr, 2019; Elo, 2009), large-scale policy interventions have the potential to foster significant improvements in family health. Overall, a preponderance of GI studies indicates that unconditional cash transfers, like the ECTC, offer a variety of benefits (e.g., psychological well-being, food sufficiency, financial security) for families (Bastagli et al., 2016; Günther, 2020; Samuels & Stavropoulou, 2016). In line with this, substantial reductions in food insufficiency among low-income families who received the monthly ECTC payments have been reported (Adams et al., 2022; Shafer et al., 2022). Further, evidence has shown that the ECTC lifted over three million children out of poverty (Parolin et al., 2022). Given the ECTC’s high income threshold, more information is needed about how it differentially impacted families of varied income levels. Evidence is needed about the additional health benefits families received and the specific pathways through which those benefits were gained.

What this Study Adds

Personal anecdotes of public experiences with policy change can wield considerable influence on federal policy decision-making. To better understand the ECTC’s perceived impact, this study provides greater insight on the benefits gained by families across the income spectrum. The findings herein offer a broader conception of poverty experiences and showcase the enduring resilience of families to nurture their children. Prior to the ECTC, most families experienced financial challenges, yet displayed an unwavering resilience in the face of difficulty. Through the use of various coping strategies (e.g., resource use, financial management strategies), resilient families displayed an absorptive capacity to buffer the impacts of incessant shocks on their livelihood (Béné et al., 2014). Despite this and consistent with the HDOP framework (Bray et al., 2020), families experiencing financial insecurity encountered disempowerment—in that they routinely faced difficult choices and were constrained by insufficient income. Notably, experiences of financial constraint were shared by families with incomes above and below 200% FPL. In some ways, the receipt of monthly, unconditional ECTC payments was universally beneficial and inspired a transformative resilient capacity (Béné et al., 2014). For many families, parents felt the ECTC transformed a largely untenable financial context to one of expanded personal autonomy over their financial circumstances.

The Capability Approach offers a valuable framework to understand a pathway through which the ECTC improved family well-being. It posits that all human beings have a right to the freedom to enjoy valuable beings and doings (Alkire, 2005; Robeyns, 2005). The ECTC supported this freedom and expanded opportunities for families to improve their well-being. Participating parents were empowered with financial freedom to meet child needs and wants, engage in valued family activities (e.g., cost-based activities), invest in financial savings, and improve parent–child relationships. A hierarchical path to family well-being emerged, in which families primarily used the ECTC funds to meet household basic and routine needs (e.g., housing, food, bills), which resulted in reduced stress. Subsequently, parents had greater financial ability to invest in their children’s well-being (e.g., recreational programming, cognitive behavioral therapy, family activities). Thus, financial empowerment may be a viable pathway to improvements in child well-being.

Our study findings support existing literature which indicates that the attainment of financial resources is instrumental in supporting the achievement of holistic health (Bastagli et al., 2016; Gibson et al., 2020; Sun et al., 2021). Importantly, health improvements have wide-ranging benefits that extend beyond the family unit to the broader social policy context. For example, family-centered public policy programs have been associated with reduced crime, labor market and health care benefits, and federal cost savings (Lee et al., 2012). The unconditional ECTC benefits may have produced a short-term social return on investment, as families invested in health-promoting activities. In light of the improvements in food security (Adams et al., 2022; Shafer et al., 2022), significant reductions in child poverty (Parolin et al., 2022), and improvements to family well-being, a long-term expansion of GI programs, like the ECTC, may be needed.

Policy Implications and Considerations

An impartial evaluation of the CTC policy expansion should consider the broad, system-level impact it had upon families. This single policy change produced improvements in several essential domains for a prosperous society including food security, housing stability, childcare (children > 5 years old), financial security, and consumer spending. Policymakers should consider potential long-term health benefits if the ECTC expansion was maintained. Additionally, the trade-offs of such a sweeping policy as the ECTC should be considered. The fiscal costs of the policy should be weighed against the public benefits gained. Two approaches to facilitate this evaluation will be described. On the one hand, policymakers may consider the merits of the ECTC independently. Put simply, what is the relationship between the public benefits gained and harms incurred as a result of the ECTC’s expansion? The findings herein offer rich data from a socioeconomically diverse sample to answer this question. On the other hand, policymakers may consider the ECTC’s value relative to existing federal poverty-reduction strategies. For example, the ECTC’s unconditional cash assistance allowed families to meet pressing needs that were previously unaddressed by existing federal assistance policies (e.g., medical debt, childcare). Finally, policymakers should consider if the benefits of the ECTC expansion were evenly distributed among its recipients. Legislative debates over the Child Tax Credit expansion often discuss the appropriate income threshold for recipients. Our findings demonstrate that some families with higher incomes experienced persistent financial strain and benefited from the ECTC. These findings may provide useful data to inform the discourse. Moreover, a thorough consideration of the multidimensional nature of poverty may inform social assistance policymaking. In summary, this study presents findings of parent perceptions of the ECTC policy expansion and their viewpoints around its anticipated subsequent termination. Personal anecdotes and experiences can wield considerable influence in lawmaking decisions; thus, the findings may support decision-making about future federal GI policies.

Limitations

This study has several strengths and limitations. Rigorous qualitative methodology was used to establish themes, and findings were drawn from a large, racially, and socio-economically diverse sample. The findings address a novel and timely, policy-relevant public health issue. Study limitations include limited generalizability due to a lack of geographic and racial representation of additional historically minoritized populations (e.g., Latino, Asian, and indigenous persons). Although the income threshold for inclusion was 200% FPL, themes from families with incomes marginally above or below this threshold were not distinct. Additionally, findings about ECTC spending could have benefited from objective purchasing data.

Conclusion

Prior to receiving ECTC benefits, families were constrained by insufficient income, accumulated debt, and emotional distress. The consistent, unconditional ECTC payments expanded personal autonomy over life circumstances, and parents harnessed this freedom to invest in opportunities to improve the well-being of their families. Importantly, the ECTC improved well-being for families across both income classes, suggesting GI policies have the potential to improve shared human needs and values, regardless of financial context. Due the short-term nature of this expansion, the potential long-term benefits of the ECTC monthly payments have yet to be explored. Yet, these initial findings suggest a promising approach to creating a lasting reduction in child poverty and improved family well-being.