“…As a potential buffer against the economic and health disruptions brought about by the pandemic, the federal government provided multiple rounds of stimulus, the earliest of which included direct payments, a temporarily expanded and more generous unemployment insurance (UI) program, and the Paycheck Protection Program (PPP), which allowed business owners to apply for funds to maintain their workforce.14 The COVID-19 questions probed whether families received money from each of these three programs. Around 16 percent of families reported receipt of unemployment benefits, with modestly higher incidence in the middle of the distribution than in the tails.15 Unsurprisingly, about 80 percent of families reported receiving stimulus payments, with incidence relatively stable across the income distribution but dropping off precipitously toward the top. In contrast to the distribution of the other two programs, PPP loans were more concentrated at the top, reflecting patterns in business ownership (Aladangady et al., 2023).
“II. Implications for Income and Net Worth
“All of these considerations are useful context for changes in income and wealth between the 2019 and 2022 surveys. In particular, growth in mean income (measured for the calendar year before the survey, so 2018 and 2021, respectively, for the most recent two surveys) was generally either absent or more modest among lower-income and less-educated families and very strong at the top, resembling the distribution of pandemic experiences over income and education.16 These differences are even more pronounced when excluding unemployment benefits, which, in their exceptional generosity over this period, buoyed income growth among lower income families.17 At the extreme is families in the second usual income quintile, among whom unemployment benefits added over 2 percentage points to mean income growth, explaining nearly half of it.”