The pandemic is exacerbating preexisting social and economic inequalities in the United States and abroad, finds a new study from the Social Policy Institute (SPI) at Washington University in St. Louis.
The study, “Household Spending Patterns and Hardships during COVID-19: A Comparative Study of the U.S. and Israel,” draws on national surveys conducted early in the pandemic to investigate COVID-19’s effects on self-reported consumer spending behaviors and hardship experiences for households in Israel and the U.S., two countries with very different responses to the pandemic.
“We found that the economic relief packages passed early in the pandemic were not sufficient to fully buffer economically vulnerable households from the effects of the pandemic,” said Stephen Roll, research assistant professor at the Brown School and first author on the paper.
“Fortunately, this problem is likely not insoluble — the fact that middle-income households in Israel struggled less than their American counterparts indicates that these support gaps can be covered by well-designed social policies, both in reaction to and in preparation for economic crises,” he said.
Key findings from the analysis:
- Despite dramatically different experiences with (and reactions to) the pandemic, households in both the U.S. and Israel often faced similar levels of spending volatility and hardship in the early months of the pandemic, though food insecurity was a much larger concern in the U.S.
- The countries were similar in that economically marginalized minority groups in each — Black and Hispanic households in the U.S. and Arab Israeli households in Israel — reported greater spending volatility on essential needs and higher rates of food insecurity and struggles to pay their bills.
- Controlling for other factors, pre-pandemic income and employment status appeared much less predictive of spending volatility and hardship in Israel than in the U.S.; in particular, middle-income households in the U.S. fared worse (relative to high-income households) than their Israeli counterparts.
Co-authors on the study are: Michal Grinstein-Weiss, the Shanti K. Khinduka Distinguished Professor at the Brown School and director of the Social Policy Institute; Yung Chun and Olga Kondratjeva, both data analysts at SPI; and Mathieu Despard, associate professor at the University of North Carolina-Greensboro.