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U.S. Household Financial Vulnerability: Prediction Analyses in the COVID-19 Pandemic

U.S. Household Financial Vulnerability: Prediction Analyses in the COVID-19 Pandemic In this article, we projected household financial vulnerability in the COVID-19 pandemic. Using a nationally representative sample of households from the 2017 Panel Study of Income Dynamics (PSID), we analyzed potential changes in financial status in the pandemic resulting from loss of income and savings from discretionary consumption. We provided a ranking of household groups by their financial vulnerability and the first estimate of the number of households at various degrees of financial vulnerability. Our study showed that a substantial part of the universal stimulus payments was made to households that had sufficient income to cover basic needs and those saved by reducing discretionary expenses. For the most financially vulnerable, the first one-time stimulus payment was too little and too late to help with their financial difficulties. Our findings shed light on to whom and in what form the US government should direct financial assistance during the pandemic. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Financial Counseling and Planning Springer Publishing

U.S. Household Financial Vulnerability: Prediction Analyses in the COVID-19 Pandemic

Journal of Financial Counseling and Planning , Volume 33 (2): 15 – Jul 8, 2022

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Publisher
Springer Publishing
Copyright
© 2022 Springer Publishing Company
ISSN
1052-3073
eISSN
1947-7910
DOI
10.1891/jfcp-2021-0009
Publisher site
See Article on Publisher Site

Abstract

In this article, we projected household financial vulnerability in the COVID-19 pandemic. Using a nationally representative sample of households from the 2017 Panel Study of Income Dynamics (PSID), we analyzed potential changes in financial status in the pandemic resulting from loss of income and savings from discretionary consumption. We provided a ranking of household groups by their financial vulnerability and the first estimate of the number of households at various degrees of financial vulnerability. Our study showed that a substantial part of the universal stimulus payments was made to households that had sufficient income to cover basic needs and those saved by reducing discretionary expenses. For the most financially vulnerable, the first one-time stimulus payment was too little and too late to help with their financial difficulties. Our findings shed light on to whom and in what form the US government should direct financial assistance during the pandemic.

Journal

Journal of Financial Counseling and PlanningSpringer Publishing

Published: Jul 8, 2022

References