Working Paper: NBER ID: w28312
Authors: Naomi Feldman; Ori Heffetz
Abstract: In early August, 2020, during the COVID-19 pandemic, Israel disbursed one-time, universal grants to its citizens, of $220 per adult and $150 per child. Using survey data, we estimate that 25–45 percent either had already mostly spent or were planning to spend the money by year’s end and 36–52 percent mostly paid down debts. Interestingly, about as many people reported mostly donating the grant or using it to help family or friends as reported saving it (10–18 percent), with donations mostly originating from higher-income respondents. This voluntary rerouting of governmental assistance may help alleviate the trade-off between targeting and simplicity/speed of disbursement.
Keywords: No keywords provided
JEL Codes: D14; D91; E21; E62; H24; H31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Direct government payments (H53) | Consumer spending behavior (D12) |
| Direct government payments (H53) | Paying down debt (G51) |
| Direct government payments (H53) | Donations to family or friends (D64) |
| Income level (D31) | Choice to donate grant (D64) |