COVID-19 Stimulus Payment Expenditures and People with Disabilities

Background/Purpose:

To help offset the financial burden of the pandemic, Congress authorized economic impact payments (EIP). People with disabilities (PWD) were disproportionately impacted by the pandemic, which likely heightened the need for the EIP among PWD. PWD also incur substantial disability-related expenses that restricts their ability to use a given amount of income for a desired utility. Because of the weight of these costs, the EIPs, which were provided at an equal rate for PWD and PWOD, were unlikely to have contributed to the same degree of social protection and/or economic stimulus as PWD. This study examines the differences in how PWD and PWOD reported using their EIP. We hypothesize that, controlling for income and other sociodemographic factors, (1) PWD will be more likely to use the EIP funds for immediate basic needs compared to PWOD; and (2) less likely to use their stimulus funds on second order expenditures, like giving to charity, bolstering savings, or paying off debt.

Methods:

This study utilized data from the 2020-2021 U.S. Census Household Pulse Survey. The survey asked respondents how they spent their EIP and respondents were given twelve choices. We developed two spending typologies from these twelve EIP spending categories. The first typology — immediate basic needs — is based on the basic needs identified in the Supplemental Poverty Measure, and include food, clothing, household supplies, rent, mortgage, and utilities. The second typology — second order expenditures —represents the remaining EIP expenditure options that were not considered immediate basic needs, like recreational goods, car payments, home goods, charity, savings, and debt.

Results:

There were substantial differences in how PWD and PWOD spent their stimulus payments. Overall, PWD were significantly more likely to spend their EIP on immediate basic needs compared to PWOD (OR = 1.42, p = .001). For example, PWD were more likely to spend their EIP on food (OR = 1.2, p = .001), clothing (OR = 1.5, p = .001), household supplies (OR = 1.4, p = .001), mortgage payments (OR = 1.1, p = .001), and utilities (OR = 1.2, p = .001). Conversely, PWD were significantly less likely to use their EIP on second order expenditures (OR = 0.88, p = .001) and were less likely than PWOD to use their EIP on vehicle payments (OR = .87, p = .001), charity (OR = .82, p = .001), or put their stimulus income into savings (OR = .58, p = .001).

Conclusions and Implications:

Results from this study suggest that EIP provided substantial benefits for PWD who were more likely to use the funds to cover their immediate basic needs, even when holding income constant. These findings also suggest that, though the payment amounts were equal monetarily, the EIP were not as generous for PWD due to the need to dedicate resources to cover required disability-related costs. Given that PWD require more income to make ends meet, future stimulus payments should consider an adjusted EIP for PWD.