Inequalities in Financial Coping During the COVID-19 Crisis: New Insights from Linked Credit Report, Alternative Financial Service, and State Administrative Data

The COVID-19 pandemic and ensuing recession exacerbated economic vulnerabilities in part because the most advantaged workers retained jobs while the least advantaged faced declining employment prospects and financial insecurity. Although the 2020 CARES Act expanded eligibility for Unemployment Insurance (UI) and provided an additional $600 per week for recipients, workers experienced variation in UI receipt due to differences in state UI benefit levels, the efficiency of bureaucratic systems, and time-to-receipt of payments. Lawrence Berger and colleagues will examine inequalities in financial coping strategies in the wake of the pandemic. They will examine how UI and other social welfare benefits, financial regulations, and lender practices affected indebtedness for low-income families. Their research questions include: To what extent did increased UI benefits reduce reliance on credit? Did delayed UI payments lead to worse debt-related outcomes than timely payments? Were there inequalities in the types of credit used by those who received UI compared to those who did not? And how did these patterns change when the CARES ACT expansions expired?