Household financial fragility during COVID-19: rising inequality and unemployment insurance benefit reductions

Household financial fragility during COVID-19: rising inequality and unemployment insurance benefit reductions

Abstract

We draw on new high frequency survey data collected from repeated cross-sections of Americans over the period June 2020 through October 2020. These data capture rich measures of household financial fragility and employment status. We find no evidence of an economic recovery in household finances as of October of 2020.

In fact, by some measures, we find evidence of a building “second wave” of negative shocks to household finances and of growing inequality in financial fragility by household income, educational attainment, and gender from August to September/October of 2020. Finally, using difference-in-difference models, we estimate that the expiration of the CARES Act’s Pandemic Unemployment Compensation benefits, which augmented unemployment insurance by $600 a week, significantly increased the financial fragility of unemployed workers in America.

Full content of the publication

Tags

COVID-19 Financial Fragility insurance Unemployment

Authors

Annamaria Lusardi

Academic Director, Global Financial Literacy Excellence Center (GFLEC)

Daniel Schneider

Peter Tufano

Web

Additional Information

Date published

21/12/2020

Document Type

R

Geographies

United States

Target

Research

Pages

38

Source

GFLEC

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