New report recommends strengthening CTC, EITC to grow American workforce
By: Juan Tirado
A new report by the Committee for Economic Development of The Conference Board (CED) urges business leaders and policymakers to work together to strengthen the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC) to increase labor force participation and attachment in the US.
CED’s Growing the American Workforce report explores different ways to increase workforce participation in the United States. The report highlights four main strategies that business leaders and policymakers can focus on to reach this goal; strengthening the CTC and EITC, lessening barriers to participation through improved employee-employer matching, helping parents remain connected to the workforce while meeting family responsibilities, and supporting older workers who wish to remain working.
Increasing the benefits of working through an expansion of the EITC would be a straightforward approach for policymakers to incentivize more people to enter the labor force. This approach has already led to an increase in labor force participation in the past. However, the current EITC for adults without children is very small, with some 97 percent of EITC dollars going to families with children. Policymakers interested in boosting labor force participation should advocate to increase the EITC for adults without children and expand the age of eligibility to incentivize younger workers at the onset of their working careers and low-income workers approaching retirement, according to the report.
Helping Americans who want to work more is increasingly important to the financial stability and economic growth of the US. While a growing labor force has led to economic growth in the past, a comparatively low workforce participation rate today suggests that more can be done to incentivize work and reduce barriers.