DP15532 Financial Fragility during the COVID-19 Pandemic

Author(s):	Robert Clark, Annamaria Lusardi, Olivia S Mitchell
Publication Date:	December 2020
Keyword(s):	financial literacy, financial resilience, older population, vulnerable groups
JEL(s):	D14, G53, I38
Programme Areas:	Financial Economics
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=15532

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.