Since the first round of stimulus checks and additional unemployment measures last year, academic researchers have had some time to assess the impact. Here’s what’s been learned.
Since the first round of stimulus checks and additional unemployment measures last year, academic researchers have had some time to assess the impact. Researchers from the Federal Reserve and the University of Houston have assessed the different studies to find the key themes. At a high level, last year the CARES Act appears to have boosted spending by around 2% to 5% and there are other important effects under the surface. How stimulus checks are spent depends on several factors. If someone fears they are out of work for some time, then they tend to spend less of their check. However, if they view their unemployment as temporary, then more of the check will be spent sooner. If they are working and in a higher income group, more of the check will typically be saved. Secondly, the fact that past rounds of checks came during more severe lockdown and social distancing measures also impeded spending. There was simply less things for stimulus checks to go on, with a lot of businesses closed and movement restricted. In aggregate, from past checks across all recipients about a third of the check amount was spent, a third went to debt paydown and a third was saved.
