How Additional Economic Impact Payments Could Lower Poverty By State

The American Rescue Plan Act included four policies that the Urban Institute estimates will keep 14 million people out of poverty in 2021. One of those policies, the $1,400 recovery rebates, will keep an estimated 12.4 million people out of poverty on its own; this is more people than would be lifted out of poverty by three other major provisions: expanded unemployment insurance benefits, higher Supplemental Nutrition Assistance Plan benefits, or advancing a portion of the child tax credit.

Using Urban’s Analysis of Transfers, Taxes, and Income Security microsimulation model with 2016 American Community Survey data, we estimate the reduction in poverty from extending an additional $1,400 payment to (1) most residents or (2) only US citizens and others with Social Security numbers. We provide results by state, age, and race.

 

Unlike many transfer programs that are targeted to specific populations, cash benefits can help lift all people out of poverty, particularly if all people in the US (not just citizens) are eligible for them.

To learn more about our national estimates and methodology, please see our brief “How Additional Cash Payments Would Reduce Poverty.”