The United States government has sent stimulus payments to millions of eligible Americans to ease the economic burden caused by the Coronavirus. Although families use their stimulus payments differently, the U.S. Census Bureau’s Household Pulse Survey divides payment use into four categories:
- Someone in the household already received, or plans to receive a stimulus payment which is used, or will be used, mostly for expenses
- Someone in the household already received, or plans to receive a stimulus payment which is used, or will be used, mostly to pay off debt
- Someone in the household already received, or plans to receive a stimulus payment which is used, or will be used, mostly to add to savings
- Stimulus payment not received or expected
The results show a racial disparity in how the stimulus payment was used. Between June 11 and June 16, 2020, Black respondents spent the highest percentage of their stimulus payment on expenses, 75%, followed by Asian respondents, 71%, and then Hispanic and Latino respondents, 64%. White respondents spent the smallest percentage of their stimulus payment on expenses, 49%. This pattern also appears inversely with respect to saving money. White respondents reported putting the highest percentage of their stimulus money into savings, 14%. Respondents of all other racial groups reported that less than 5% of their stimulus payment went into savings.
An inverse relationship appears between household income and the percentage of the stimulus payment a household spends on expenses. As household income increases, a smaller percentage of the stimulus payment is used to pay for expenses, which shows that stimulus payments are particularly important to low-income families. Households with children were also more likely to use their stimulus payment on paying expenses than households without children, which highlights the importance of the stimulus payments to help provide for children. The fact that all people, regardless of race, used at least 49% of their stimulus payments on expenses shows that stimulus payments are crucial in helping families cope with the economic effects of the COVID-19 pandemic.