Hardship is greatest among vulnerable Israelis already struggling financially

By: Olga Kondratjeva, data analyst III, Social Policy Institute; Michal Grinstein-Weiss, director, Social Policy Institute; Talia Schwartz-Tayri, researcher, Ben-Gurion University of the Negev; John Gal, professor, The Paul Baerwald School of Social Work and Social Welfare, The Hebrew University of Jerusalem; senior researcher, the Taub Center for Social Policy Studies in Israel; & Stephen Roll, […]

Safe, affordable child care is a right, not a privilege

As the United States nears the seventh month of weathering COVID-19’s impact, it has become clear that the economy will not recover simply by encouraging businesses to re-open or consumers to keep shopping. Working adults with children are being disproportionately affected by COVID-19 and will continue to struggle without stronger federal and state support for child care.

Gig work can be a lifeline, but it may be disappearing for those that need it

When you think of gig work—types of work where online apps and platforms allow workers to get paid for a range of services including ride-sharing, home repairs, art sales, and property rental—you might imagine a flexible job that enables anyone to earn income. If you have a reliable car and a smartphone, you can download […]

Material hardship among lower-income households: the role of liquid assets and place

The Earned Income Tax Credit (EITC) provides substantial financial support to low-income workers, yet around a quarter of EITC payments are estimated to be erroneous or fraudulent. Beginning in 2017, the Protecting Americans from Tax Hikes Act of 2015 requires the Internal Revenue Service to spend additional time processing early EITC claims, delaying the issuance of tax refunds. Leveraging unique data, we investigate how delayed tax refunds affected the experience of hardship and unsecured debt among EITC recipients. We find that early filers experienced increased food insecurity relative to later filers after the implementation of the refund delay.

The impact of tax refund delays on the experience of hardship and unsecured debt

The Earned Income Tax Credit (EITC) provides substantial financial support to low-income workers, yet around a quarter of EITC payments are estimated to be erroneous or fraudulent. Beginning in 2017, the Protecting Americans from Tax Hikes Act of 2015 requires the Internal Revenue Service to spend additional time processing early EITC claims, delaying the issuance of tax refunds. Leveraging unique data, we investigate how delayed tax refunds affected the experience of hardship and unsecured debt among EITC recipients. We find that early filers experienced increased food insecurity relative to later filers after the implementation of the refund delay.

Using financial tips to guide debt repayment: experimental evidence from low-and moderate-income tax filers

Much of the literature on household finances tends to focus on discrete or relatively objective measures like savings, debt, economic mobility, and there has been a lack of research on holistic measures of financial well-being. This gap is due in part to the absence of a common understanding of how to define and measure financial well-being; a gap that was recently addressed by the Consumer Financial Protection Bureau’s development of a financial well-being scale. However, the research on this scale is still scarce and little is known about how financial well-being evolves over time. To that end, this paper uses a two-wave survey of low- and moderate-income tax filers to present the first longitudinal analysis of the CFPB’s financial well-being scale. Using a combination of descriptive analysis, OLS regression, and fixed effects panel regression, we assess (1) the stability of financial well-being over a six-month period; (2) the extent to which household characteristics predict volatility in financial well-being; and (3) the relationship between the experience of adverse financial events, including financial shocks and material hardships, and financial well-being. We find that financial well-being scores are extremely stable over the short-term, and that household characteristics are generally not strong predictors of financial well-being changes. We also find that, while adverse financial events like the loss of a job are significantly associated with declines in financial well-being, these changes are not large. These findings have implications for researchers and practitioners interested in using the financial well-being scale in program and policy evaluations.

Housing Hardships Reach Unprecedented Heights during the COVID-19 Pandemic

SPI research, published on Brookings Institution: Groundbreaking data from a new large-scale, nationally-representative survey of low- and moderate-income (LMI) households administered by the Social Policy Institute at Washington University in St. Louis in April of 2020 suggests that individuals have been facing increased housing hardship such as evictions, delayed rent or mortgage payments, and unexpected utility payments and home repairs during the pandemic.

Messaging matters when it comes to COVID-19 economic impact payments

The way policymakers and financial capability practitioners communicate about the CARES economic impact payments and other current or future payments may help guide households to use these benefits in the way best suited to their financial situation. This is important because while some households may use the CARES payments to pay down debt and other households may be fortunate enough to be able to save their payments, others will need these payments to simply make ends meet.

We don’t need a map to tell us who COVID-19 hits the hardest in St. Louis

We don’t need a map to tell us that policymakers, health officials, corporations, and St. Louis residents themselves must continue to break down economic barriers to create partnerships and solutions that support the most vulnerable in our city – those who were already facing a disproportionate social, financial, and health burden prior to COVID-19 entering their lives.

What tax refunds tell us about how households might use economic impact payments

While economic impact payments are different than a tax refund, we can be fairly confident, based on this research, that in this moment of emergency, payments from CARES Act will be used on essential purchases. It is also possible households will allocate their economic impact payments to clear debt entirely or to make a minimum payment in order to keep some liquid assets in checking or savings.