Trends in Hardship and Mental Health in the United States at the End of 2020
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By Patrick Cooney and H. Luke Shaefer
Introduction
In late March of 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a nearly $2 trillion spending bill that included income support provisions to U.S. households to reduce hardship. Faced with historically high rates of unemployment early in the pandemic, the CARES Act was equally historic, larger in scale than annual stimulus spending following the Great Recession or the Great Depression. Through a mix of stimulus checks, expanded unemployment assistance, aid to state and local governments, and protections from eviction and foreclosure, the CARES Act was able to blunt the potentially catastrophic economic impact of the COVID-19 pandemic.
However, the CARES Act stimulus checks (Economic Impact Payments) were one-time payments, and the $600 weekly supplement the federal government provided to all recipients of unemployment assistance expired at the end of July, leading many observers to predict an increase in hardship in the fall. At the same time, by August the economy was showing signs of improvement, with the unemployment rate on a steady decline, potentially mitigating a further rise in hardship.
This brief analyzes nationally representative survey data from August through December of 2020, to better understand changes in material hardship after the expiration of CARES Act major income support provisions, and prior to a second relief package. In the final months of 2020, we find increasing rates of material hardship in the forms of food insecurity and missed housing payments, as well as increasing rates of depression and anxiety. Rates are particularly high for households with children, with these households reporting food insecurity and housing hardship 70 to 100 percent higher than households without children. Rates of hardship began to rise after October, when COVID-19 infection rates began their rapid rise, and the economic recovery stalled.
We also look at a new round of data from mid-January 2021, to understand how reported hardship changed following the COVID-19 economic relief bill passed in late December, which included a new but smaller round of stimulus payments and federal unemployment supplements. Changes in survey response rates lead us to believe that hardship may be underreported in the January survey, making these data less comparable to estimates from the previous month. With this caveat in mind, the results from mid-January show some mixed signs of declining hardship in some measures following passage of the relief bill.
Taken in sum, these data add to the body of research suggesting income support provisions during the COVID crisis are necessary to prevent increased hardship. Going forward, we propose that Congress should pass a relief package in which income supports are tied to improvements in the labor market, rather than arbitrary deadlines. Further, given the much higher rates of hardship faced by families with children, we recommend provisions that explicitly target them, such as the Biden administration’s proposal to expand and make fully refundable the child tax credit.
Key Findings
- Across a number of measures, hardship rose significantly in the final months of 2020.
- Adults with children reported food insecurity and housing hardship at a rate 70 to 100 percent higher than adults without children.
- January data suggest the relief bill passed in late December may have helped to stabilize households, although changes in survey response rates makes us cautious with this conclusion.
- Going forward, more aid should be targeted directly to households with children, and relief measures tied to economic indicators, rather than arbitrary deadlines.
Conclusion
Since June of 2020, we have been tracking material hardship using data from the U.S. Census Bureau’s Household Pulse survey. In late July, we wrote about how this data suggested that, while hardship was still high, the income support provisions in the CARES Act were largely successful. We did not see huge spikes in hardship, and other studies found that, on the whole, U.S. households were in solid financial position.
Reviewing this same data for the final months of 2020, we come to a different conclusion. Hardship has risen significantly. In December of 2020, among adults with children, 18 percent sometimes or often did not have enough to eat in the prior seven days; 23 percent found it very difficult to pay for household expenses; one-quarter were behind on rent; and a rapidly increasing share were frequently displaying symptoms of anxiety and depression. It appears from a first look at January data that the economic relief bill passed at the end of December may have provided meaningful relief, but hardship remains elevated, and more income supports are needed until the economy fully recovers. Taken as a whole, these data suggest the crisis is far from over, and American households need significant relief until the pandemic, at long last, subsides.