How Americans used their COVID‐19 economic impact payments. Issue 4 (6th January 2021)

• Record Type: Journal Article
• Authors: Asebedo, Sarah D.; Liu, Yi; Gray, Blake; Quadria, Taufiq Hasan
• Is Part Of: Financial planning review. Volume 3:Issue 4(2020)
• Page Start: n/a
• Page End: n/a
• Publication Date: 2021-01-06
• Subjects: behavioral life cycle hypothesis -- CARES Act -- COVID‐19 -- economic impact payments -- marginal propensity to consume -- spending; Financial planning industry -- Periodicals; Finance, Personal -- Periodicals; 332.024
• DOI: 10.1002/cfp2.1101
• Languages: English
• ISSNs: 2573-8615

Abstract

Abstract: This study investigates how Americans used their CARES Act Economic Impact Payments (EIP) for their spending needs, spending wants, and financial transactions. The results from a sample of 1, 172 Amazon MTurk users collected in July 2020 suggest that EIP use varied across spending and financial transaction categories. Those with job instability, less financial resources, and more people to care for received essential support. A smaller proportion of the population spent at least some of their EIP on their wants. Americans' primarily focused their EIP spending on housing, food, and hobbies. In addition, people were able to improve their financial situation through investing and debt reduction. Decisions to save the EIP were related to economic recovery concerns; a broad policy package and public messaging strategy that offers assurance of economic recovery and stability might enhance policy effectiveness for boosting immediate economic growth through EIP spending.