Consumption Heterogeneity by Occupation: Understanding the Impact of Occupation on Personal Consumption during the COVID-19 Pandemic

Christopher Cotton, Vaishali Garga and Justin Rohan

No 20-16, Working Papers from Federal Reserve Bank of Boston

Abstract: This paper exploits the variation in the unemployment rate of different occupations in the first part of the COVID-19 pandemic to analyze the response of consumption spending to unemployment risk. We find that earlier in the pandemic, higher unemployment risk did not reduce relative spending. However, as the pandemic proceeded, higher unemployment risk reduced relative spending. This pattern held across both essential and nonessential spending categories. We find that “high-risk” occupations had three common characteristics: lower ability to be performed from home, higher physical proximity on the job, and a nonessential nature.

Keywords: consumption; occupation; unemployment risk; COVID-19; CARES act (search for similar items in EconPapers)
JEL-codes: E21 E32 E62 (search for similar items in EconPapers)
Pages: 30
Date: 2020-12-01
New Economics Papers: this item is included in nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedbwp:89289

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DOI: 10.29412/bosfrb.wp.2020.16

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