Consumption Heterogeneity by Occupation: Understanding the Impact of Occupation on Personal Consumption during the COVID-19 Pandemic
Policies that were implemented to limit the spread of COVID-19 did not affect all occupations equally during the first part of the pandemic. Workers who could perform their jobs virtually from home or who had jobs that were deemed essential experienced little risk of unemployment compared with workers whose jobs could not be performed from home and were considered nonessential. To help mitigate the economic fallout from the lockdown measures and other policy interventions, the U.S. government passed the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act, which included expanded unemployment insurance benefits and stimulus payments to households. The authors use data on high-frequency credit/debit card spending to investigate how consumption spending varied by occupation during the period from early March through the end of August 2020. In particular, they analyze whether workers in occupations associated with higher risk of unemployment due to the lockdowns demonstrated relatively lower consumption spending and whether the CARES Act may have influenced their spending behavior. In addition, the authors introduce a new metric, based on job characteristics, to predict which occupations likely faced higher rates of unemployment in the observed months of the pandemic.