Paper #1740

Title:

Distributional effects of COVID-19 on spending: A first look at the evidence from Spain

Authors:

José Garcia Montalvo and Marta Reynal-Querol

Date:

September 2020

Abstract:

We use data from a a large Spanish personal finance management fintech to have a first look at the heterogeneous effects of the COVID-19 on spending. We show a large reduction on spending since mid-March, coinciding with the shutdown of the economy and the strict confinement of population. Since the end of April the is a recovery of spending although, by the end of June, it is still 20% below the level of the previous year. Opposite to what has been observed in other countries, the recovery of spending is not more intense in low-income families than in their high-income counterparts. However, there is some evidence of differences in the intensity of rebound by age and account balance. This suggest differences in the intensity of government benefits for low-income families and financial difficulties for low-liquidity families.

Keywords:

spending, income, liquidity, COVID-19, administrative data, high frequency

JEL codes:

E21, E62, E65, H31

Area of Research:

Statistics, Econometrics and Quantitative Methods

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