The Bureau of Labor Statistics of the U.S. Department of Labor is the principal Federal agency responsible for measuring labor market activity, working conditions, and price changes in the economy.
The U.S. CARES Act and household resilience
Maya B. Brandon
Aylward, Laderman, Oliveira, and Teng measure the impact of the CARES Act through household resilience during
the COVID-19 pandemic. In this article, the authors define resilience “as the number of weeks a household whose
employment income falls to zero can maintain its typical rate of consumption using only nonemployment income
and liquid assets.” Using data from the U.S. Census Bureau Survey of Income and Program Participation, the
authors developed a sample to calculate the resources needed for a household to maintain its consumption levels
without employment income.
Ultimately, the authors find that the CARES Act had a positive effect, increasing the median household resilience
to 46 weeks from 31 weeks. The effects differed across income levels, demographic groups, and geographic
regions. Households with the lowest levels of income had an initial resilience median of 21 weeks and experienced
a 43-week increase with the CARES Act transfers (payments from the two programs). Black and Hispanic
households had an initial resilience median of 25 and 26 weeks, respectively. CARES Act transfers increased the
resilience of these households to 44 and 45 weeks. The enhanced unemployment insurance benefits affected
households substantially, increasing household resilience even more than the EIP did. The CARES Act programs
also equalized the resilience experienced across regions.
Aylward, Laderman, Oliveira, and Teng conclude that ”the CARES Act transfers boosted lower-income households’
resilience significantly more than that of their higher-income counterparts and helped decrease the discrepancy in
resilience across racial groups and geographic regions.”