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Initial Impacts of the Pandemic on Consumer Behavior: Evidence from Linked Income, Spending, and Savings Data


  • Natalie Cox

    (Princeton University)

  • Peter Ganong

    (University of Chicago)

  • Pascal Noel

    (University of Chicago)

  • Joseph Vavra

    (University of Chicago)

  • Arlene Wong

    (Princeton University)

  • Diana Farrell

    (JPMorgan Chase Institute)

  • Fiona Greig

    (JPMorgan Chase Institute)

  • Erica Deadman

    (JPMorgan Chase Institute)


We use US household-level bank account data to investigate the heterogeneous effects of the pandemic on spending and savings. Households across the income distribution all cut spending from March to early April. Since mid-April, spending has rebounded most rapidly for low-income households. We find large increases in liquid asset balances for households throughout the income distribution. However, lower-income households contribute disproportionately to the aggregate increase in balances, relative to their prepandemic shares. Taken together, our results suggest that spending declines in the initial months of the recession were primarily caused by direct effects of the pandemic, rather than resulting from labor market disruptions. The sizable growth in liquid assets we observe for low-income households suggests that stimulus and insurance programs during this period likely played an important role in limiting the effects of labor market disruptions on spending.

Suggested Citation

  • Natalie Cox & Peter Ganong & Pascal Noel & Joseph Vavra & Arlene Wong & Diana Farrell & Fiona Greig & Erica Deadman, 2020. "Initial Impacts of the Pandemic on Consumer Behavior: Evidence from Linked Income, Spending, and Savings Data," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 51(2 (Summer), pages 35-82.
  • Handle: RePEc:bin:bpeajo:v:51:y:2020:i:2020-02:p:35-82

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    References listed on IDEAS

    1. Marianne P. Bitler & Hilary W. Hoynes & Diane Whitmore Schanzenbach, 2020. "The Social Safety Net in the Wake of COVID-19," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 51(2 (Summer), pages 119-158.
    2. Asger Lau Andersen & Emil Toft Hansen & Niels Johannesen & Adam Sheridan, 2020. "Pandemic, Shutdown and Consumer Spending: Lessons from Scandinavian Policy Responses to COVID-19," Papers 2005.04630,
    3. Peter Ganong & Pascal Noel, 2019. "Consumer Spending during Unemployment: Positive and Normative Implications," American Economic Review, American Economic Association, vol. 109(7), pages 2383-2424, July.
    4. Ganong, Peter & Noel, Pascal & Vavra, Joseph, 2020. "US unemployment insurance replacement rates during the pandemic," Journal of Public Economics, Elsevier, vol. 191(C).
    5. Ezra Karger & Aastha Rajan, 2020. "Heterogeneity in the Marginal Propensity to Consume: Evidence from Covid-19 Stimulus Payments," Working Paper Series WP-2020-15, Federal Reserve Bank of Chicago, revised 21 Feb 2021.
    6. Diane Alexander & Ezra Karger, 2023. "Do Stay-at-Home Orders Cause People to Stay at Home? Effects of Stay-at-Home Orders on Consumer Behavior," The Review of Economics and Statistics, MIT Press, vol. 105(4), pages 1017-1027, July.
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    More about this item


    COVID-19; US economy; household; labor market;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior


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