Human capital and pandemic-related stimulus usage

Abstract

Using nationally representative data from the 2021 National Financial Capability Study (NFCS), this study investigates the association between human capital, as proxied through education and objective financial knowledge, and stimulus payment usage for spending, debt repayment, savings, and investments during the COVID-19 pandemic. The results from a sample of 23,344 observations suggest that human capital relates to differences in how people used their COVID-19 stimulus payments. In particular, the study found that human capital is associated positively with using stimulus payments to add to savings or invest in the stock market.