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What do fiscal stimulus packages mean for household debt?

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  • María Pía Olivero
  • Mikheil Dvalishvili

Abstract

We study the links between fiscal stimulus packages during times of crisis and households' liabilities. We do so by using household‐level data on income and liabilities from the Consumer Expenditure Survey, and estimating an empirical model along those in the literature on the consumption effects of these packages. We find that receiving a check from the government tends to translate into a reduction in outstanding liabilities for American households. This effect is robust to controlling for income levels and household size. The effects are driven by households whose income is below the median and by those who remain employed during the crisis.

Suggested Citation

  • María Pía Olivero & Mikheil Dvalishvili, 2023. "What do fiscal stimulus packages mean for household debt?," Contemporary Economic Policy, Western Economic Association International, vol. 41(2), pages 282-299, April.
    • Handle: RePEc:bla:coecpo:v:41:y:2023:i:2:p:282-299
    DOI: 10.1111/coep.12592
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    References listed on IDEAS

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