Financial Outcomes by Race During COVID-19

JPMorgan Chase & Co Policy Brief June 2021

26 Pages Posted: 2 Aug 2021

See all articles by Fiona Greig

Fiona Greig

JPMorgan Chase Institute

Erica Deadman

JPMorgan Chase Institute

Date Written: June 30, 2021


Given that the COVID-19 pandemic has taken a higher toll on communities of color, and previous JPMorgan Chase Institute research has demonstrated racial gaps in financial outcomes (Farrell et al. 2020), COVID-19 could result in further exacerbation of racial disparities in financial outcomes. We use administrative banking data paired with self-reported race information to study racial gaps in families’ income, consumption, and liquid assets, and the response of each to the COVID-19 pandemic.

Consistent with prior research on liquid balances during the COVID pandemic (see Greig et al. 2021; and JPMorgan Chase Institute 2021 for most recent data), we observe increases in account balances for all race groups. Black families have lower starting balances than Latinx or White families and see the smallest balance increases in dollar terms during the pandemic – trends that hold even after accounting for income differences. Within each race group, women have lower account balances and depleted their balance gains more quickly than men. Balance changes throughout the pandemic are due to combined changes in account inflows and outflows, and we observe that Black and Latinx families experience larger increases in both total income and rate of receiving unemployment insurance (UI), relative to White families; Latinx families drop their everyday spending the most at the onset of the pandemic, and also consistently transfer money out of their accounts more frequently than Black or White families.

This research underscores that pandemic-based financial need was not evenly distributed by race. Public data on unemployment show an immediate and much larger spike in unemployment among Black workers than White workers in April 2020 and a slower subsequent recovery in employment, a result echoed in our observations of unemployment insurance by race. We also show that pandemic-related government supports were progressive in that they delivered cash to low-liquidity families, disproportionately boosting the cash balances of Black and Latinx families. These financial supports enabled families to continue their everyday spending, particularly for Black families. Finally, Black and Latinx families’ balances depleted faster than White families’. This signals the critical, but also temporary, nature of those government supports. This may also indicate that families of color faced circumstances that made it more difficult to maintain cash buffers, underscoring the relative precarity of their financial positions should they experience more prolonged unemployment.

Keywords: financial health, racial gaps financial outcomes, household finance, stimulus payments, covid-19 financial impacts

JEL Classification: D10, D14, J15, J18, D63, H53, H50

Suggested Citation

Greig, Fiona and Deadman, Erica, Financial Outcomes by Race During COVID-19 (June 30, 2021). JPMorgan Chase & Co Policy Brief June 2021, Available at SSRN:

Fiona Greig

JPMorgan Chase Institute ( email )

Washington, DC
United States

Erica Deadman (Contact Author)

JPMorgan Chase Institute ( email )

601 Pennsylvania Avenue NW
Washington, DC 20004
United States

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