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COVID-19, the CARES Act, and Families’ Financial Security

Author

Listed:
  • Neil Bhutta
  • Jacqueline Blair
  • Lisa Dettling
  • Kevin Moore

Abstract

In response to the severe economic shock induced by the COVID-19 pandemic, Congress passed the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act. Using data on savings, income, and expenses from the Survey of Consumer Finances, we show that cash assistance included in the CARES Act allows almost all families to cover their normal, recurring expenses in the event of long-term unemployment. In the absence of government support, nearly half of families who lose their income for six months would not be able to cover their expenses due to low levels of liquid saving and standard unemployment insurance benefits that do not fully replace income.

Suggested Citation

  • Neil Bhutta & Jacqueline Blair & Lisa Dettling & Kevin Moore, 2020. "COVID-19, the CARES Act, and Families’ Financial Security," National Tax Journal, National Tax Association;National Tax Journal, vol. 73(3), pages 645-672, September.
    • Handle: RePEc:ntj:journl:v:73:y:2020:i:3:p:645-672
    DOI: 10.17310/ntj.2020.3.02
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    RePEc Biblio mentions

    As found on the RePEc Biblio, the curated bibliography for Economics:
    1. > Economics of Welfare > Health Economics > Economics of Pandemics > Specific pandemics > Covid-19 > Economic policy > Household support > CARES Act

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    Cited by:

    1. Maksim Belitski & Christina Guenther & Alexander S. Kritikos & Roy Thurik, 2022. "Economic effects of the COVID-19 pandemic on entrepreneurship and small businesses," Small Business Economics, Springer, vol. 58(2), pages 593-609, February.
    2. Dergiades, Theologos & Milas, Costas & Panagiotidis, Theodore, 2022. "Unemployment claims during COVID-19 and economic support measures in the U.S," Economic Modelling, Elsevier, vol. 113(C).
    3. Johnna Montgomerie, 2023. "COVID Keynesianism: locating inequality in the Anglo-American crisis response," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 16(1), pages 211-223.
    4. Dreger, Christian, 2023. "The impact of demand and supply shocks on inflation. Evidence for the US and the Euro area," MPRA Paper 116316, University Library of Munich, Germany.
    5. Iwona Bak & Beata Szczecinska, 2021. "The Financial Situation of Enterprises in the Clothing and Footwear Sector in the Face of the COVID-19 Pandemic," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 233-245.
    6. Marta Lachowska & Wayne Vroman & Stephen A. Woodbury, 2020. "Experience Rating and the Dynamics of Financing Unemployment Insurance," National Tax Journal, National Tax Association;National Tax Journal, vol. 73(3), pages 673-698, September.
    7. Adam P. Balcerzak & Ilona Pietryka (ed.), 2021. "Contemporary Issues in Economy. Proceedings of the International Conference on Applied Economics: Economics," Books, Institute of Economic Research, edition 1, volume 11, number 25, June.

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