Study shows how people spent their CARES act funds during COVID-19 pandemic
As a severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) strain had spread considerably among nearly all nations worldwide, economic compensations were administered to general populations, in an effort to ease financial burdens.
In the U.S., referred to as the Coronavirus Aid, Relief and Economic Security (CARES) Act’s Economic Impact Payments (EIPs), lawmakers introduced legislation to distribute a particular amount of monetary value, in the form of direct payments, to individuals and households meeting the criteria.
Researchers at Texas Tech University conducted a probe at how the monetary value was spent, including if it was spent to reduce debt or to add onto savings.
The study was published in the journal Financial Planning Review.
According to researchers, the majority of people they probed had utilized a portion of their financial assistance toward spending needs. About half of the sample, however, used a portion to make financial transactions on spending wants.
Sarah Asebedo, the study’s lead author, stated the following, “The results suggest the EIPs provided essential support that helped people meet their spending needs in fundamental areas—e.g., housing and food—and improve or stabilize their financial situation.”
Asebedo added, “The EIPs provided much needed support to those experiencing job instability with less financial resources and more people to care for, in addition to those who experienced a job change during the pandemic, because these individuals generally allocated a greater proportion of their payment to their needs and less to their wants or financial transactions.”
Additional co-authors of the study include Yi Liu, Blake Gray, and Taufiq Hasan Quadria.