Financial Fragility During the COVID-19 Pandemic

12 Pages Posted: 4 Nov 2020 Last revised: 15 Jan 2021

See all articles by Robert L. Clark

Robert L. Clark

North Carolina State University - Poole College of Management

Annamaria Lusardi

George Washington University - Department of Accountancy; National Bureau of Economic Research (NBER)

Olivia S. Mitchell

University of Pennsylvania - The Wharton School; University of Pennsylvania - The Wharton School, Pension Research Council; National Bureau of Economic Research (NBER)

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Date Written: January 12, 2021

Abstract

Early in the COVID-19 pandemic, much of the US economy was closed to limit the virus’ spread, and several emergency interventions were implemented. Our analysis of older (45-75) respondents fielded in April-May of 2020 indicates that about one in five respondents was financially fragile and would have difficulty facing a mid-size emergency expense. Some subgroups were at particular risk of facing financial difficulties, especially younger respondents, those with larger families, Hispanics, and the low income. Moreover, the more financially literate were better able to handle such shocks, indicating that knowledge can provide some additional protection during a pandemic.

Keywords: Financial literacy, financial resilience, older population, vulnerable groups

JEL Classification: G53, D14, I38

Suggested Citation

Clark, Robert L. and Lusardi, Annamaria and Mitchell, Olivia S., Financial Fragility During the COVID-19 Pandemic (January 12, 2021). Wharton Pension Research Council Working Paper No. 2020-25, Available at SSRN: https://ssrn.com/abstract=3723940 or http://dx.doi.org/10.2139/ssrn.3723940

Robert L. Clark (Contact Author)

North Carolina State University - Poole College of Management ( email )

Hillsborough Street
Raleigh, NC 27695-8614
United States
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Annamaria Lusardi

George Washington University - Department of Accountancy ( email )

George Washington University School of Business
Washington, DC 20052
United States

HOME PAGE: http://business.gwu.edu/profiles/annamaria-lusardi/

National Bureau of Economic Research (NBER)

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Olivia S. Mitchell

University of Pennsylvania - The Wharton School ( email )

Philadelphia, PA 19104-6365
United States

University of Pennsylvania - The Wharton School, Pension Research Council ( email )

3302 Steinberg Hall-Dietrich Hall
3620 Locust Walk
Philadelphia, PA 19104-6302
United States

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

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