Bachas, Natalie
[Author]
;
Ganong, Peter
[Other];
Noel, Pascal J.
[Other];
Vavra, Joseph S.
[Other];
Wong, Arlene
[Other];
Farrell, Diana
[Other];
Greig, Fiona E.
[Other]National Bureau of Economic Research
Initial Impacts of the Pandemic on Consumer Behavior
Published:
Cambridge, Mass: National Bureau of Economic Research, 2020
Published in:NBER working paper series ; no. w27617
Extent:
1 Online-Ressource; illustrations (black and white)
Language:
English
DOI:
10.3386/w27617
Identifier:
Reproduction note:
Hardcopy version available to institutional subscribers
Origination:
Footnote:
System requirements: Adobe [Acrobat] Reader required for PDF files
Mode of access: World Wide Web
Description:
We use U.S. household-level bank account data to investigate the heterogeneous effects of the pandemic on spending and savings. Households across the income distribution all cut spending from March to early April. Since mid April, spending has rebounded most rapidly for low-income households. We find large increases in liquid asset balances for households throughout the income distribution. However, lower-income households contribute disproportionately to the aggregate increase in balances, relative to their pre-pandemic shares. Taken together, our results suggest that spending declines in the initial months of the recession were primarily caused by direct effects of the pandemic, rather than resulting from labor market disruptions. The sizable growth in liquid assets we observe for low-income households suggests that stimulus and insurance programs during this period likely played an important role in limiting the effects of labor market disruptions on spending