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After Across-the-Board Decline, Consumer Spending
Has Rebounded Fastest for Low-Income Households

Consumer purchases in late March 2020 were more than 35 percent lower than in the same period the previous year, according to detailed data on household credit and debit card charges and banking transactions. While the drop occurred in all income groups, and all groups subsequently recovered, by late May, spending by those in the lowest income quartile was only 10 percent lower than a year earlier, while spending by highest quartile households remained down by over 20 percent. Faculty Research Fellows Peter Ganong, Joseph Vavra, and Arlene Wong, and their collaborators Natalie Bachas, Diana Farrell, Fiona Greig, and Pascal Noel, report these findings, and also document a sharp increase in liquid balances for many households, in a recent working paper (27617). Wong summarizes their findings in the short video above.

Five NBER working papers distributed this week examine the economic impact of the COVID-19 pandemic and various policy responses to it. The studies analyze how the $600 unemployment insurance supplement in the CARES Act affected consumer spending (27576), present cross-country evidence on the effect of programs designed to keep businesses afloat through the pandemic (27637), estimate the impact on restaurant traffic of lifting lockdown provisions (27650), explore the role of fintech firms as substitutes for traditional banks in serving firms that benefit from the Paycheck Protection Program (27659), and describe gender-related differences in the pandemic’s labor market effects (27660).

More than 210 NBER working papers have presented pandemic-related research. These papers are open access and have been collected for easy reference. View them in reverse chronological order or by topic area.



New NBER Research

14 August 2020

Older Women Face Barriers to Working Longer

Women benefit more than men, financially, from working longer, but they can face discrimination that impedes doing so and they may fall between the cracks of existing anti-discrimination legislation, a study by Ian Burn, Patrick Button, Theodore F. Figinski, and Joanne Song McLaughlin finds.

13 August 2020

Long-Run Effects of Incentivizing Work after Childbirth

Single mothers exposed to expansion of the Earned Income Tax Credit (EITC) right after a their first child is born are more than 3 percentage points more likely to be employed on their child’s fifth birthday than single mothers who were not eligible for the expanded EITC until their first child was between the ages of three and six, Elira Kuka and Na'ama Shenhav find.

12 August 2020

401(k) Plan Participant Responses to COVID-19

Only 2.1 percent of 401(k) plan participants invested in target date funds made any changes to their portfolios in the first quarter of 2020, suggesting that delegation of portfolio management responsibility can lead to stable investor behavior even during highly volatile times, David Blanchett, Michael S. Finke, and Jonathan Reuter find.
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Bulletin on Retirement and Disability

An Introduction to Current Research by Fellows in
NBER Retirement and Disability Research Center




The NBER Retirement and Disability Research Center has two competitive training programs for junior scholars, funded through a cooperative agreement with the Social Security Administration. An overview of the program and an introduction to current fellows’ research is featured in the current issue of the Bulletin on Retirement and Disability. Also in this issue are a summary of how bill and benefit timing affects low-income and elderly people’s finances, a summary of how student loan forgiveness affects disability insurance application, and a study of the effectiveness of state-level sick pay mandates.
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2020 Summer Institute Methods Lectures



The 2020 Methods Lectures introduce differential privacy, a method of assessing the trade-off between releasing more-detailed information based on survey responses and protecting respondents' privacy, and illustrate its application in several settings. The lectures and associated slides are available to view online or download.


The NBER Digest

China’s Efforts to Impose Equality Didn’t Last;
Decades Later, Elite Hierarchies Have Revived




From the end of the Chinese civil war through the Cultural Revolution of the ‘60s and ‘70s, China’s rulers aggressively attempted to eradicate economic and educational inequality. There were short-term successes, but according to studies summarized in the August edition of The NBER Digest the changes haven’t lasted. Also featured in this issue of The Digest are working papers focusing on long-term outcomes of efforts to mandate equality in China, the environmental-justice effects of California’s carbon market, benefits for the very young of food-stamp availability, reactions of diners to having calorie data posted on menus, and the role of fear of COVID-19 in suppressing economic activity, and challenges to CPI measurement posed by the pandemic.
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The NBER Reporter

How Decision Fatigue and First Impressions Biases
Can Affect the Behaviors of Analysts and Investors




Forecast accuracy declines over the course of a day as the number of forecasts an analyst has issued increases, and the more forecasts the analyst issues, the more likely those forecasts will reflect herding toward a consensus, according to research featured in the current edition of the NBER Reporter. Also in this issue of the Reporter, NBER affiliates write about making health care decisions in conditions of uncertainty, the impacts of tax credits on corporate behavior, medical spending and savings in elderly households, and research in the NBER's decade-long project on the Economics of Digitization.
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Bulletin on Health

What Can We Learn About COVID-19 Infection Rates
and Infection Fatality Rates Without Randomized Testing?




The summer issue of the Bulletin on Health features two studies that introduce methods for using currently available information to better understand COVID-19 infection rates and the implied infection fatality rates. One paper generates upper and lower bounds on the rates of COVID-19 infection under minimal assumptions, and finds that these bounds are necessarily wide, due to the small proportion of the population that has been tested. The second paper leverages additional assumptions and data, such as travel patterns from the virus epicenters, to infer infection rates. Although the studies take different approaches, they both indicate that infection fatality rates are considerably lower than the fatality rates among confirmed COVID-19 cases. Also featured in this issue of the free Bulletin on Health are a study of the long-term impacts of OxyContin’s reformulation on fatal drug overdoses, a study of the role of Medicaid coverage in reducing infant mortality during flu pandemics, and a profile of NBER research associate Doug Almond.
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