Summary Frontline healthcare workers – especially direct care workers (DCWs), such as home health aides, struggle due to low pay, lack of benefits, and difficult working conditions. The need for these workers is growing. Unless frontline healthcare jobs improve, positions may be difficult to fill, and care for vulnerable members of society may be compromised. […]
Abstract Universal basic income has gained renewed interest among policymakers and researchers in the U.S. While research indicates that unconditional cash transfers produce diverse benefits for households, public support lags in part due to the predicted unemployment and frivolous spending. To understand how Americans would reorganize their lives around unconditional cash transfers, this paper examines […]
Summary Though the growth of the gig economy has coincided with increased economic precarity in the new economy, we know less about the extent to which gig work (compared with other self-employment arrangements and non-gig work) may fuel economic insecurity among American households. We fill this gap in the literature drawing on a sample of […]
Summary We completed a study about frontline healthcare workers – the benefits they get through work and how they are doing financially. This brief provides highlights from our survey to 2,321 workers and interviews with 30 workers.
Social Policy Institute research will be presented in seven different panels during the APPAM conference Nov. 17 to Nov. 18, 2022. Below are the papers and discussions that will be presented by the SPI team, including staff and faculty affiliates.
A Trans-Atlantic Policy Forum could bring together academic researchers,
policy makers, advocates, and corporate leaders in the U.S. and U.K. to develop
insights to fuel changes in public policies and corporate behavior to promote the
financial security of low- and moderate-income (LMI) individuals and families.
Abstract Economic disruptions related to the COVID-19 pandemic left many households without the income necessary to meet basic needs. We describe an innovative, community-based partnership between a financial services company, philanthropic funders, and employers to provide financial assistance to hotel workers in New Orleans who lost jobs and income due to the COVID-19 pandemic. Results […]
Abstract The combined supply and demand shocks of the COVID-19 pandemic have created the largest consumer behavior shift in recent history, while exposing millions of households to material hardships like food insecurity and housing instability. In this study, we draw on national surveys conducted early in the pandemic to investigate the pandemic’s effects on self-reported […]
The Earned Income Tax Credit (EITC) provides substantial financial support to low-income Universal basic income has gained renewed interest among policymakers and researchers in the U.S. While research indicates that unconditional cash transfers produce diverse benefits for households, public support lags in part due to the predicted unemployment and frivolous As policy-makers grapple with whether […]
The Earned Income Tax Credit (EITC) provides substantial financial support to low-income Universal basic income has gained renewed interest among policymakers and researchers in the U.S. While research indicates that unconditional cash transfers produce diverse benefits for households, public support lags in part due to the predicted unemployment and frivolous spending. To understand how Americans […]
Small business owners experienced a drastic economic disruption caused by the COVID-19 pandemic. Government pandemic assistance failed to reach many small business owners, especially those historically underserved by financial institutions. Drawing on a 2021 survey of 246 small business owners, the Social Policy Institute at Washington University in St. Louis descriptively examined the extent to […]
Press release: May 11, 2022 According to a study by the Social Policy Institute at Washington University in St. Louis, the convergence of college non-completion and student debt among borrowers lead to higher rates of material hardship, healthcare hardship, and financial difficulties than those with a high school degree, those with a college degree, and […]
Abstract Prior research shows unemployment has a negative effect on mental health, yet whether this relationship is affected by financial factors is unknown. For example, having money in savings may mitigate the impact of job loss on mental health. We use structural equation modeling with data from the Socio-Economic Impacts of COVID-19 Survey with a […]
Abstract While supports for people with disabilities have increased, significant healthcare and financial barriers persist. State-administered Medicaid Buy-In programs for working people with disabilities, distinct from broader buy-in discussions that have emerged as some states consider expanding access to health insurance, are intended to incentivize employment and protect against a loss of Long-Term Services and […]
Abstract The Earned Income Tax Credit (EITC) provides substantial financial support to low-income workers in the USA, 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 […]
Mathieu Despard, faculty director of SPI, has been selected as an advisor to join the Academic Research Council of the Consumer Financial Protection Bureau (CFPB).
The 2021 temporary expansion of the Child Tax Credit (CTC) is unprecedented in its reach and is predicted to cut American child poverty by more than half. The expanded CTC provides families with $3,600 for every child in the household under the age of six and $3,000 for every child between the ages of six […]
The Social Policy Institute (SPI) at Washington University in St. Louis partnered with PerkUp Financial Health LLC, a financial services technology company, to study an emergency financial assistance program offered to employees of three hotels in New Orleans, LA who have been affected by the COVID-19 pandemic. PerkUp serves as a technology hub for a […]
Mathieu Despard, faculty director at SPI, discusses how workplaces have innovated with their benefits over the course of the pandemic.
The federal Earned Income Tax Credit (EITC) provides substantial financial assistance to low- and moderate-income workers and has been shown to reduce poverty and encourage employment. Many U.S. states have also implemented their own EITCs to supplement the federal tax credits. Leveraging unique administrative and survey data and employing a difference-in-differences approach, this study investigates […]
Lower-income households are at risk for material hardship, particularly amidst the economic fallout of COVID-19. Where one lives (e.g., suburb, small town) may affect this risk due to variable access to resources, yet the evidence is mixed concerning the influence of place. We used a pooled, national cross-sectional sample of 66,046 lower-income tax filers to […]
Stephen Roll and Mathieu Despard, researchers at SPI, recently received the CFP© Board’s ACCI Financial Planning Paper Award for their paper on income loss and financial distress during the COVID-19 pandemic. The award is given to a well-written paper that focuses on important financial planning issues which can be used by consumers, financial planning professionals, and policymakers […]
Financial counseling has been found to be effective in improving consumers’ credit outcomes and could be expanded through the workplace to reach lower-income workers who struggle with various financial challenges. We examine engagement and credit outcomes associated with a workplace financial counseling program offered to 2,849 frontline workers in New York City. Age and credit […]
The concept of universal basic income (UBI) first gained traction in the United States in the 1960s Civil Rights Movement and again recently due to the 2008 recession and COVID-19 pandemic. Still, the idea lags in popularity in comparison to existing cash transfer policies like the Earned Income Tax Credit and COVID relief packages. We […]
In this study, we examined Onward, an employer-based mobile app that enables workers to save via payroll deduction and receive financial education and coaching as a means to address financial challenges such as difficulty paying bills on time, managing debt, and accruing savings. An important feature of Onward is that employees can save automatically through […]
MedPut offers a way for employees to pay their out-of-pocket health care expenses through payroll deducted or Health Savings Account (HSA) payments capped at 5% of gross pay. Employees that use MedPut are much more likely to report having problems paying medical bills and to report putting off health care due to cost concerns. Nearly […]
In this study, we examined Manifest, a digital platform that makes it easier for employees to transfer 401k retirement accounts when they change jobs. Transferring accounts reduces the likelihood employees cash out and helps them consolidate their retirement savings. We examined 401k plan activity among nearly 15,000 employees of a private university over a four-year […]
In this study, we examined HoneyBee, a service company that provides access to 0% APR loans and financial coaching through the workplace. HoneyBee aims to offer employees in need a more affordable credit alternative to payday and auto title loans and therefore help addressing significant cash flow emergencies. Data for this exploratory study included 65 […]
This study examines how demographic, financial, and intrinsic personality characteristics predict household participation in Israel’s Child Development Account (CDA) program, the Savings for Every Child Program (SECP).
Findings suggest that these services are reaching a population that experiences financial exclusion, though evidence is mixed concerning how these services help workers with LMI resolve key financial challenges. Community collaboration focused on employee financial wellness presents opportunities to advocate for higher wages and better benefits.
Availability of different EFWP benefits ranged from 11 to 15% and over a third of workers were unaware of whether their employer offered an EFWP. Experiencing financial difficulties predicted both EFWP awareness and use suggesting that employers should take time to assess employees’ specific financial challenges to select benefits. Yet, use of EFWPs by LMI workers may suggest the need for better compensation and work conditions.
Data obtained from the Socioeconomic Impacts of COVID-19 Survey indicate that, despite extreme income and health disparities before and during the COVID-19 outbreak, Black and Hispanic people remain more resilient and optimistic than their white counterparts.
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.
Although financial counseling has been studied in community-based settings, programs offered in the workplace are understudied and yet may aid low- to moderate income employees in improving their financial situations. This study examines workers’ engagement in and associated credit outcomes from an employer-based financial counseling program in the New York City area. Findings suggest that participants engaged equally in services except for older and non-English speaking workers, who had lower levels of digital engagement. In-person engagement in services was minimal. Credit score improvements were modest, but greater for workers who had
scores in the lowest quartile at baseline. These credit score increases may be due to the reduction of delinquent accounts for workers with the lowest baseline scores.
Interest among employers is growing in Employee financial wellness programs (EFWPs), a new type of benefit to address financial stress among employees. EFWPs benefits include financial counseling, small-dollar loans, and savings programs that address employees’ non-retirement financial needs. Little evidence exists concerning the availability and use of and outcomes associated with EFWPs, especially among low- and moderate-income (LMI) workers who may be in greatest need of these benefits. We present findings concerning awareness and use of EFWPs from a national survey of LMI workers (N=16,650). Availability of different EFWP benefits ranged from 11 to 15% and over a third of workers were unaware of whether their employer offered an EFWP. Experiencing financial difficulties predicted both EFWP awareness and use suggesting that employers take time to assess employees’ specific financial challenges to select benefits. Yet use of EFWPs by LMI workers may suggest the need for better compensation and work conditions.
Tax refunds are an opportunity for Earned Income Tax Credit (EITC) recipients to build emergency savings. Randomly assigned behavioral interventions in 2015 and 2016 have statistically significant impacts on refund saving take-up and amounts among EITC recipients who filed their taxes online. From a survey experiment, we also find that EITC recipients have a 49 percent and 59 percent increased likelihood of deferring 20 percent of their refunds for six months when hypothetically offered 25 and 50 percent savings matches (p < .001), respectively. These findings can inform policy development related to encouraging emergency saving at tax time.
Many U.S. households—especially those with low- to moderate-incomes (LMI)—struggle to save for retirement. To address this issue, the Department of the Treasury launched myRA, a no-fee retirement account designed primarily to help people who lacked access to employer-sponsored plans build retirement savings. In this paper, we report findings from two myRA-focused field experiments, both of which were administered to well over 100,000 LMI online tax filers before and during the 2016 tax season. The first experiment involved sending one of three different myRA-focused email messages to tax filers immediately prior to tax season, and the second experiment involved incorporating myRA-focused messages and choice architecture directly into an online tax filing platform. Messages were chosen to address different barriers to retirement savings LMI households may face. We find that, though the general level of interest in myRA was very low in this population, interest and enrollment in myRA depends heavily on the way in which the benefits of the accounts are framed. Results from both experiments indicate that messages emphasizing the possibility of receiving a larger refund in the future were the most effective at increasing interest in myRA, while messages focused around the simplicity and ease of use of the accounts were less effective. We also conduct several subsample analyses to investigate the extent to which these effects differed by key household characteristics.
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.
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.
The number of individuals with student loan debt who do not earn their degrees is on the rise; nevertheless, there is little research that demonstrates the financial conditions and circumstances of these individuals. We address this knowledge gap by comparing the financial outcomes of student debt-holders who started college but did not earn a degree—those […]
Mat Despard, SPI research, writes about how he and his colleagues will use surveys to learn about the economic impacts of COVID-19 and how these impacts may vary by race, household income, assets, and debt, employment status and industry, and place.
Mat Despard, SPI research, writes about policy changes that will help households better cope with the economic fallout of COVID-19 and be better prepared for future catastrophic events.