Human Capital and Pandemic-Related Stimulus Usage
37 Pages Posted: 21 Nov 2022
Date Written: June 30, 2022
Abstract
Using nationally representative data from the 2021 National Financial Capability Study (NFCS), this study investigates the association between human capital, as proxied through education and financial knowledge, and stimulus payment usage for debt repayment, savings, and investments during the COVID-19 pandemic. The results from a sample of 23,344 observations suggest that human capital is associated positively with using stimulus payments to add to savings or invest in the stock market. This study also suggests that differences in human capital may have adversely affected wealth inequality during the COVID-19 pandemic.
Keywords: COVID-19, Stimulus Payment, Behavioral Life-Cycle Hypothesis, Marginal Propensity to Consume, Human Capital, Wealth Inequality
JEL Classification: D14, D31, D63, E21, J24
Suggested Citation: Suggested Citation