MORNING CONSULT ECONOMIC INTELLIGENCE
Pandemic Economics: How COVID-19 is Shaping American Household Behavior
The coronavirus has precipitated an unprecedented health and economic crisis, creating unprecedented challenges for households and businesses. A critical question is how this may be changing how Americans make important economic decisions. Morning Consult and Moody’s Analytics have teamed up, conducting an in-depth survey of 5,000 adults in mid-September, to examine how the pandemic is impacting decisions over household finances, parenting, starting a business, employment, and moving.
This page will host the research as it becomes available. The press release detailing the research series is available here.
In this paper, we explore how the pandemic has affected movement across geographies, jobs and industries. The key findings are:
- Americans view cities less favorably as a result of the pandemic, consistent with a shift out of urban areas in recent months, but changing perceptions are mostly driven by people who currently live in suburban or rural areas.
- Highly educated young workers, particularly those that are politically liberal, still strongly prefer cities to the country, which aligns closely with those employed by the tech sector. This signals that the most influential industry of the past decade will remain foundational to regional growth.
- Respondents still tend to hold a favorable view of the geography in which they live, signaling that a continued decline in mobility is more likely than a major shift in the years ahead.
- A majority of survey respondents are unwilling to make an interstate move for a new job, a trend that coincides with the rise of remote-work arrangements.
- Unemployed workers remain confident in their prospects to find a new job and willing to switch industries, which bodes well for their prospects in the post-pandemic economy.
- Training and education are unlikely to reduce labor market mismatches or mitigate unequal employment outcomes across the skills and education spectrum since lower-skilled workers remain less willing to increase their skills.
In this paper, we explore the bargaining power of workers in the age of COVID-19 and the role that essential workers have played in the employer-employee relationship during the pandemic. The key findings are:
- The pandemic exerted moderate downward pressure on workers’ willingness to bargain with their employers in aggregate, and particularly on low-income and less well-educated workers who disproportionately experienced a loss of pay or income during the pandemic. At the other end of the spectrum, highly educated workers have grown more willing to bargain with their employers, providing additional evidence of the inelasticity of demand for high-skilled labor.
- Wage growth during the next business cycle is likely to follow the same path of the prior business cycle, with wage pressures at the low end of the income spectrum remaining subdued well into the recovery.
- The striking and persistent difference between the willingness of men and women to ask for pay increases makes it even more difficult to address and eliminate the gender disparity in wages.
- There is a strong generational divide in the willingness to bargain with employers. Older workers are less likely to have asked for increases in pay, and they remain less willing to do so in light of the pandemic.
- Just over half of surveyed adults self-identified as essential workers. Men were significantly more likely to consider themselves essential than women. The gender gap is the least pronounced in healthcare, which is intuitive since this is a health crisis first and foremost, but it widens in other industries where it may not be as clear what constitutes essential work.
- Nearly one-third of essential workers received a pay raise because of the risk they have taken during the pandemic. The more comfortable essential workers are in asking for a raise, the more likely they were to have received a pay raise. Specifically, a 10-percentage point increase in the share of essential workers who are comfortable asking for a raise is associated with a 1.3-percentage point gain in the share of essential workers who got a raise during the pandemic.
This paper explores the economic fallout from the COVID-19-fueled recession and its impact on small-business closures as well as plans to start new businesses:
- The pandemic is forcing the closure of thousands of small businesses.
- Black and Hispanic small-business owners have been disproportionately affected by COVID-19 even after controlling for education and income.
- Young and middle-age men and women entrepreneurs have been more likely to go out of business due to the pandemic.
- The pandemic has not materially stifled Americans’ entrepreneurial spirit. This bodes well for the long-run recovery.
- Younger individuals reported a greater desire to open a business than older individuals, as expected. But a solid Black and Hispanic individuals indicated a greater desire to open a business in the wake of the pandemic than white individuals with similar age or education.
- Men are more likely than women to indicate they want to start a business.
- Individuals with high risk tolerance are more likely to have friends and family members who started a business., highlighting the importance of environmental and social factors on risk-taking and entrepreneurship.
In this paper, we explore how living with school-age children has affected decision-making during the pandemic. The key findings are:
- Households with children experienced sharper job and income losses than those whose children are not living
- Female parents are more than twice as likely as men to reduce their work hours among couples living together.
- Uncertainty surrounding school re- openings is high, as less than 20% of parents said their children had returned to full-time in-person schooling in the fall.
- Among respondents with children, 30% were using SNAP benefits and 17% were using unemployment insurance benefits to cover expenses.
- The overreliance on nonwage income during the pandemic leads to concerns about making debt payments as less than 40% of single-parent households are very confident in their ability to make minimum mortgage payments.
- The survey highlights the disproportionate effect of the pandemic on households with children and under- scores the need for additional support aimed at providing income to house- holds and financial aid to schools.
In this paper, we explore the impact of the pandemic on household finances. The key findings are as follows:
- More than six months into the pandemic, households remain highly dependent on stimulus payments and unemployment insurance benefits to pay for everyday expenses
- Nearly 12 million households are unsure they can make timely mortgage payments.
- The pandemic has prevented well over one-third of unemployed workers from conducting a job search.
- Almost one-third of workers are concerned they will lose their job or hours, or suffer a pay cut, in the near future.
- There are significant differences across income groups, highlighting the diversity of economic experiences during the pandemic, with lower-income adults faring worse than high-income adults.
- Given how tenuous households’ finances are, policymakers need to quickly provide additional financial support or risk undermining the precarious economic recovery.
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