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Raj Chetty, HarvardJohn N. Friedman, BrownNathaniel Hendren, HarvardMichael Stepner, University of Torontoand the Opportunity Insights Team
April 2021
The Economic Impacts of COVID -19:Evidence from a New Public DatabaseBuilt Using Private Sector Data
§ How has COVID-19 affected the American economy?
§ Since Kuznets (1941), macroeconomic policy decisions have been based on data from surveys of households and businesses
§ These data provide vital aggregate information (GDP, unemployment rates), but have two limitations
1. Available only at low frequencies, sometimes with significant lags2. Cannot be disaggregated to examine variation across areas or subgroups
à We build a new publicly available database using transaction data from private companies to address these challenges and apply it to analyze the impacts of COVID-19
Measuring the Impacts of Macroeconomic Shocks and Policies
Data Construction
DataCase Study:
StimulusImpacts of COVID-19
§ Many papers have used transaction data to analyze economic impacts of COVID crisis[e.g., Alexander & Karger 2020, Baker et al. 2020, Bartik et al. 2020, Cajner et al. 2020, Chen et al. 2020, Chiou & Tucker 2020, Cox et al. 2020, Kurman et al. 2020, Kahn et al. 2020, Autor et al. 2020, Granja et al. 2020, Mongey et al. 2020]
§ Here, we construct and analyze public statistics based on private sector data rather than directly analyzing confidential sources of microdata
§ All series used in what follows are freely downloadable at www.tracktherecovery.org
§ Key challenge: constructing public statistics that are sufficiently granular for research yet sufficiently aggregated and masked to protect privacy
A New Public Database Built From Private Sector Data
Consumer Spending
Small Business Revenues
Employment
Job Postings
Education
Data Partners
Consumer Spending BenchmarkingCredit/Debit Card Data (Affinity Solutions) vs. National Accounts (Advance Monthly Retail Trade Survey)
Change in Consumer SpendingRelative to January
Retail
RMSE = 6.01 p.p.-50%
-25%
0%
+25%
+50%
January2019
April July October January2020
April July October January2021
Affinity
NationalAccounts
Affinity
NationalAccounts
Food and Accommodation
RMSE = 5.59 p.p.
Impacts of COVID-19
DataCase Study:
StimulusImpacts of COVID-19
Changes in Small Business Revenues from January to April 2020 by ZIP CodeSan Francisco
Changes in Small Business Revenues vs. Rent, by ZIP CodeFrom January to April 2020
Slope = -13% per $1000 (s.e. = 0.38)-60%
-50%
-40%
-30%
-20%
$500 $1,000 $1,500 $2,000
Median Two Bedroom Monthly Rent in 2018
Change in Small Business RevenueRelative to January
Changes in Bottom Quartile Employment Rates from January to April 2020 by ZIP CodeSan Francisco
Apr 15 June 10 Feb 27
-28%(8.9m)
-36%(11.6m jobs)
-24%(7.8m)
-40%
-30%
-20%
-10%
0%
Jan 12020
Mar 1 May 1 Jul 1 Sep 1 Nov 1 Jan 12021
Employment Changes by Income Quartile
Mar 1
Change in EmploymentRelative to January
Bottom Income Quartile
-28%(8.9m)
-8%(2.7m)
-4%(1.2m)
0%(0.1m)
-36%(11.6m jobs)
-27%(8.5m)
-19%(6.1m)
-13%(4.2m)
-24%(7.8m)
-15%(4.8m)
-8%(2.7m)
-3%(0.8m)
-40%
-30%
-20%
-10%
0%
Jan 12020
Mar 1 May 1 Jul 1 Sep 1 Nov 1 Jan 12021
Top Income Quartile
Employment Changes by Income Quartile
Mar 1
Change in EmploymentRelative to January
Bottom Income Quartile
Second Quartile
Third Quartile
Apr 15 June 10 Feb 27
+25%
-40%
-30%
-20%
-10%
0%
+10%
+20%
+30%
+40%
Change Relative toJanuary 2020
Feb 12020
Mar 1 Apr 1 May 1 Jun 1 Jul 1 Aug 1 Sep 1 Oct 1 Nov 1 Dec 1 Jan 12021
Feb 1
National Trends in Consumer Spending vs. Employment RatesRetail Trade
Consumer Spending
+25%
–30%
–2%
-40%
-30%
-20%
-10%
0%
+10%
+20%
+30%
+40%
Change Relative toJanuary 2020
Feb 12020
Mar 1 Apr 1 May 1 Jun 1 Jul 1 Aug 1 Sep 1 Oct 1 Nov 1 Dec 1 Jan 12021
Feb 1
National Trends in Consumer Spending vs. Employment RatesRetail Trade
Consumer Spending
Top Wage QuartileEmployment
Bottom Wage QuartileEmployment
Effects of Stimulus Payments
DataCase Study:
StimulusImpacts of COVID-19
§ Coronavirus Aid, Relief, and Economic Security (CARES) Act of April 2020
§ $1200 checks (phased out at higher incomes, supplement for children)
§ April 15, 2020 deposits for the majority of payments
§ Coronavirus Response and Relief Act of December 2020
§ $600 checks (phased out at higher incomes, supplement for children)
§ January 4, 2021 or January 6, 2021 deposits for the majority of payments
§ Were stimulus payments effective in increasing consumer spending?
Estimating the Effects of Stimulus Payments
4th 7th 10th 13th 4th 7th 10th 13th 16th 19th
December January
Consumer SpendingSeasonally Adjusted
$600 Stimulus ChecksDisbursed on Jan 4
Effect of the January 2021 Stimulus Checks on Daily Consumer Spending
–10 p.p.
0 p.p.
+10 p.p.
+20 p.p.
+30 p.p.
Bottom Income Quartile ZIP CodesMedian Household Income < $46,000
holidayspermutation
4th 7th 10th 13th 4th 7th 10th 13th 16th 19th
December January
Consumer SpendingSeasonally Adjusted
Spending Increased 7.9 p.p.(s.e. = 2.2 p.p)
$600 Stimulus ChecksDisbursed on Jan 4
Effect of the January 2021 Stimulus Checks on Daily Consumer Spending
–10 p.p.
0 p.p.
+10 p.p.
+20 p.p.
+30 p.p.
Bottom Income Quartile ZIP CodesMedian Household Income < $46,000
holidayspermutation
December January4th 7th 10th 13th 4th 7th 10th 13th 16th 19th
December January
Consumer SpendingSeasonally Adjusted
4th 7th 10th 13th 4th 7th 10th 13th 16th 19th
Spending Increased 7.9 p.p.(s.e. = 2.2 p.p)
Spending Increased 0.2 p.p.(s.e. = 1.6 p.p)
$600 Stimulus ChecksDisbursed on Jan 4
$600 Stimulus ChecksDisbursed on Jan 4
Effect of the January 2021 Stimulus Checks on Daily Consumer Spending
–10 p.p.
0 p.p.
+10 p.p.
+20 p.p.
+30 p.p.
–10 p.p.
0 p.p.
+10 p.p.
+20 p.p.
+30 p.p.
Bottom Income Quartile ZIP CodesMedian Household Income < $46,000
Top Income Quartile ZIP CodesMedian Household Income > $78,000
holidayspermutation
December January4th 7th 10th 13th 4th 7th 10th 13th 16th 19th
December January
Consumer SpendingSeasonally Adjusted
4th 7th 10th 13th 4th 7th 10th 13th 16th 19th
Spending Increased 7.9 p.p.(s.e. = 2.2 p.p)
Spending Increased 0.2 p.p.(s.e. = 1.6 p.p)
$600 Stimulus ChecksDisbursed on Jan 4
$600 Stimulus ChecksDisbursed on Jan 4
Effect of the January 2021 Stimulus Checks on Daily Consumer Spending
–10 p.p.
0 p.p.
+10 p.p.
+20 p.p.
+30 p.p.
–10 p.p.
0 p.p.
+10 p.p.
+20 p.p.
+30 p.p.
Bottom Income Quartile ZIP CodesMedian Household Income < $46,000
Top Income Quartile ZIP CodesMedian Household Income > $78,000
Difference between Q1 and Q4 estimate = 7.7 p.p. (p < 0.01)holidayspermutation
$126$140
$90
$45
0
50
100
150
200
COVID Relief Act (January 2021)
Consumer SpendingEstimate of 1-monthspending per $600
Effect of the COVID Stimulus Bills on Spending, by Income Group
<$46,000 $46,000 to $59,000 $59,000 to $78,000 >$78,000
ZIP Code Median Household Income
$189
$225 $229 $235
$126$140
$90
$45
0
50
100
150
200
CARES Act (April 2020)
COVID Relief Act (January 2021)
Consumer SpendingEstimate of 1-monthspending per $600
Effect of the COVID Stimulus Bills on Spending, by Income Group
<$46,000 $46,000 to $59,000 $59,000 to $78,000 >$78,000
ZIP Code Median Household Income
$0
$1000
$2000
$3000
$4000
January 12020
Mar 15 Apr 15 December 312020
Top Quartile
$2,500
$2,000
$1,300
Estimated Cumulative Increase in SavingsSavings = Earnings + Unemployment Insurance + Stimulus Checks – Spending
Δ Savings Per Personcompared to 2019
$4,000
Bottom Quartile
Q3
Q2
Aug 1
2019 Average: 7.5%
0%
10%
20%
30%
40%
Jan2019
Mar May Jul Sep Nov Jan2020
Mar May Jul Sep Nov Jan2021
Savings Rate
National Personal Savings Rates, from BEA National Accounts
$189
$225 $229 $235
$126$140
$90
$45
0
50
100
150
200
CARES Act (April 2020)
COVID Relief Act (January 2021)
Consumer SpendingEstimate of 1-monthspending per $600
Effect of the COVID Stimulus Bills on Spending, by Income Group
<$46,000 $46,000 to $59,000 $59,000 to $78,000 >$78,000
ZIP Code Median Household Income
January 2021Stimulus Policy
Projected Effect of Stimulus Checks on SpendingCouple with No Children
$600
$0 $150,000 $174,000$75,000
$1400
$0 $150,000 $200,000$75,000
Household Income
March 2021Stimulus Policy
Proposal
January 2021Stimulus Policy
Projected Effect of Stimulus Checks on SpendingCouple with No Children
$600
$0 $150,000 $174,000$75,000
$1400
$0 $150,000 $200,000$75,000
Household Income
March 2021Stimulus Policy
Proposal
Fiscal cost = $200 billion
Projected 1-month spendingincrease < $15 billion
January 2021Stimulus Policy
Projected Effect of Stimulus Checks on SpendingCouple with No Children
$600
$0 $150,000 $174,000$75,000
$1400
$0 $160,000 $200,000$75,000
Household Income
March 2021Stimulus Policy
$20 billionreallocated
Conclusion
DataCase Study:
StimulusImpacts of COVID-19
1. Policy: fine tuning based on state of the economy and observed policy impacts
§ Help target proposed $100 billion in job re-training programs, avert jobless recovery
§ New measures for state-contingent policies beyond unemployment rates?
2. Real time national accounts
§ Collaborating with others to construct a more permanent system of granular, high frequency national accounts, building on prototype constructed here
3. Research: we hope these new public data (www.tracktherecovery.org) will be helpful in supporting future work in this recession and beyond
Broader Implications and Future Work
Appendix Slides
DataCase Study:
StimulusImpacts of COVID-19
$600 Stimulus ChecksDisbursed on Jan 4
Effect: 7.9 p.p.
-30%
-20%
-10%
0%
10%
20%
30%
Dec 4 Dec 8 Dec 12 Dec 16 Dec 20 Dec 24 Dec 28 Jan 1 Jan 5 Jan 9 Jan 13 Jan 17
Consumer SpendingSeasonally Adjusted
Effect of the Recent Stimulus on Daily Consumer SpendingIncome Quartile 1
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Consumer SpendingSeasonally Adjusted
Effect of the Recent Stimulus on Daily Consumer SpendingIncome Quartile 4
$600 Stimulus ChecksDisbursed on Jan 4
Effect: 0.2 p.p.
-30%
-20%
-10%
0%
10%
20%
30%
Dec 4 Dec 8 Dec 12 Dec 16 Dec 20 Dec 24 Dec 28 Jan 1 Jan 5 Jan 9 Jan 13 Jan 17
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-10 -5 0 5 10Triple-Diff Estimate
Triple Difference BetweenQ1 and Q4 Spending: 7.7 pp
Permutation Test for Difference between Q1 and Q4 Spending
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