Financial Fragility during the COVID-19 Pandemic

The economic shutdown, soaring incidence of unemployment, and collapse of equity markets associated with the spread of the Coronavirus have placed an increasing number of American households in financial jeopardy. For low and middle income households, the increase in financial fragility threatens their ability to meet current expenses and avoid large increases in personal debt. The analysis will examine how the corona pandemic has altered the financial status of households using a nationally representative survey conducted in spring 2020 during the heart of the virus crisis. The study will focus on the role of financial literacy and knowledge on how households respond to the dramatic and unanticipated changes in their income and wealth. In addition, we will assess the impact of government transfers on financial fragility and the economic wellbeing of low and middle income households.