The early impacts of the coronavirus pandemic on Americans’ economic security

February 2022

Since many households lack the ability to weather unexpected financial shocks, how has the pandemic thus far affected Americans’ financial stability?


The coronavirus pandemic has had enormous effects on the U.S. economy due to governmental mandates temporarily closing businesses and schools, and individuals remaining home due to fears of infection. In response, policymakers expanded unemployment benefits and passed legislation providing many people with Economic Impact Payments. As a result, many Americans’ financial stability actually improved early in the pandemic, both in subjective measures, like financial satisfaction, and more objective measures, like financial fragility and savings behavior and balances.

Key Insights
Individuals who were more economically vulnerable pre-pandemic experienced differentially larger improvements in their financial situation after the pandemic’s onset.
Much of the improvement, both overall and differential, was driven by the stimulus, which was more impactful for those who were more economically vulnerable pre-pandemic.
Rather than simply help prevent widening inequality in financial stability, the governmental policy response may have helped close the gap, at least temporarily.

The authors use longitudinal survey data from the Understanding America Study, a nationally representative Internet panel, fielded in May of 2018, 2019 and 2020. They couple these data with additional surveys measuring subjective retirement preparedness and Social Security claiming intentions.