A Grant to Every Citizen: Survey Evidence of the Impact of a Direct Government Payment in Israel

39 Pages Posted: 4 Jan 2021 Last revised: 12 May 2023

See all articles by Naomi Feldman

Naomi Feldman

Hebrew University of Jerusalem

Ori Heffetz

Cornell University - S.C. Johnson Graduate School of Management; The Hebrew University of Jerusalem - Department of Economics and Center for Rationality; National Bureau of Economic Research (NBER)

Date Written: December 2020

Abstract

In early August, 2020, during the COVID-19 pandemic, Israel disbursed one-time, universal grants to its citizens, of $220 per adult and $150 per child. Using survey data, we estimate that 25–45 percent either had already mostly spent or were planning to spend the money by year’s end and 36–52 percent mostly paid down debts. Interestingly, about as many people reported mostly donating the grant or using it to help family or friends as reported saving it (10–18 percent), with donations mostly originating from higher-income respondents. This voluntary rerouting of governmental assistance may help alleviate the trade-off between targeting and simplicity/speed of disbursement.

Suggested Citation

Feldman, Naomi and Heffetz, Ori, A Grant to Every Citizen: Survey Evidence of the Impact of a Direct Government Payment in Israel (December 2020). NBER Working Paper No. w28312, Available at SSRN: https://ssrn.com/abstract=3759850

Naomi Feldman (Contact Author)

Hebrew University of Jerusalem ( email )

Mount Scopus
Jerusalem, Jerusalem 91905
Israel

Ori Heffetz

Cornell University - S.C. Johnson Graduate School of Management ( email )

324 Sage Hall
Ithaca, NY 14853
United States

The Hebrew University of Jerusalem - Department of Economics and Center for Rationality

Mount Scopus
Jerusalem, Jerusalem 91905
Israel

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

HOME PAGE: http://www.nber.org/~heffetz

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