How Did U.S. Consumers Use Their Stimulus Payments?

Olivier Coibion, Yuriy Gorodnichenko and Michael Weber

No 13604, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Using a large-scale survey of U.S. consumers, we study how the large one-time transfers to individuals from the CARES Act affected their consumption, saving and labor supply decisions. Most respondents report that they primarily saved or paid down debts with their transfers, with only about 15 percent reporting that they mostly spent it. When providing a detailed breakdown of how they used their checks, individuals report having spent or planning to spend only around 40 percent of the total transfer on average. This relatively low rate of spending out of a one-time transfer is higher for those facing liquidity constraints, who are out of the labor force, who live in larger households, who are less educated and those who received smaller amounts. We find no meaningful effect on labor supply decisions from these transfer payments, except for twenty percent of the unemployed who report that the stimulus payment made them search harder for a job.

Keywords: expectations; surveys; marginal propensity to consume; labor supply; fiscal policy; COVID-19 (search for similar items in EconPapers)
JEL-codes: E3 E4 E5 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2020-08
New Economics Papers: this item is included in nep-mac, nep-pay and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (90)

Downloads: (external link)
https://docs.iza.org/dp13604.pdf (application/pdf)

Related works:
Working Paper: How Did U.S. Consumers Use Their Stimulus Payments? (2020)
Working Paper: How Did U.S. Consumers Use Their Stimulus Payments? (2020)
Working Paper: How Did U.S. Consumers Use Their Stimulus Payments? (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp13604

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
library@iza.org

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte (hinte@iza.org).