Receipt, Spending, and Clinical Correlates of the Economic Impact Payment Among Middle- and Low-Income U.S. Adults

From May 20 to June 20, 2020, a national sample of 6,607 middle- and low-income U.S. adults were recruited and compensated with online cash credits through Amazon Mechanical Turk (MTurk), an online labor market with >500,000 participants. Participants were asked to complete an online assessment that included self-designed measures along with validated measures of health and social well-being during the COVID-19 pandemic. Inclusion criteria for the study were as follows: U.S. adults who were ages ≥22 years, reported an annual personal income of ≤$75,000, had completed ≥50 previous tasks (called Human Intelligence Tasks [HITs]) on MTurk, had an HIT approval rating of ≥50%, and passed validity checks (using four validity questions from the Minnesota Multiphasic Personality Inventory–2). A total of 9,760 individuals initially enrolled; 6,762 (69.3%) met eligibility criteria, but 155 failed validity checks. Therefore, the final sample consisted of 6,607 participants from all 50 U.S. states and the District of Columbia. Results from cross-sample investigations have indicated that data obtained from MTurk are of the same or higher quality than those obtained from traditional subject pools, especially when eligibility requirements and validity checks are used (17). Although we did not perform stratified or probability-based sampling, we used raking procedures (18) to compute and apply poststratification weights so that our sample would be nationally representative of the U.S. middle- and low-income adult population with respect to age, gender, race, ethnicity, and geographic region, according to the 2018 American Community Survey. All participants provided informed consent, and study procedures were approved by the institutional review board at the University of Texas Health Science Center at Houston.

Of the total sample, 5,083 (weighted percentage=78.8%) reported that they received the EIP, and 1,524 (21.2%) reported that they did not. Among EIP recipients, 24.0% reported receiving their stimulus by mailed check, 75.4% received it by direct deposit, and 0.6% did not specify. Among EIP recipients, 82.3% rated the EIP as having a “slightly/strongly positive impact” on their lives, 12.7% indicated “no impact,” and 5.0% indicated a “slightly/strongly negative impact.”

As shown in Table 1, bivariate comparisons indicated that EIP recipients were more likely to have tested positive or been untested for COVID-19 and to have been given a diagnosis of schizophrenia spectrum disorder or PTSD, but they were less likely to have been diagnosed as having alcohol use disorder and less likely to screen positive for current major depression, generalized anxiety disorder, suicidal ideation in the past 2 weeks, COVID-19 era–related stress, or any illicit drug use in the past month.

Table 2 shows the results of the logistic regression analyses, which revealed that being female, not being a student, not having a college degree, being married with children, employed, living in the Midwest, being a military veteran, testing positive for COVID-19, or having a history of schizophrenia spectrum disorder or PTSD were each independently and significantly associated with EIP receipt. Screening positive for COVID-19 era–related stress and past–2-week suicidal ideation were both associated with a lower likelihood of EIP receipt. The largest effects were being married (odds ratio [OR]=1.82), being a veteran (OR=2.59), having a history of schizophrenia spectrum disorder (OR=1.74) or PTSD (OR=1.51), and screening negative for recent suicidal ideation (OR=0.49).

As shown in Table 3, among EIP recipients, the largest planned expenses using the EIP were for savings and paying debt and rent, which combined for a mean total of $761.00 (63.4%) of the total EIP amount. Much of the remaining funds were planned for other essentials, such as groceries, utilities, transportation, and medical care. EIP recipients planned only small expenses for alcohol, drugs, or gambling or lottery; they totaled a mean of $32.86, or 2.7% of the total amount.

Exploratory correlational analyses revealed that screening positive for current major depressive disorder, generalized anxiety disorder, COVID-19 era–related stress, and recent illicit drug use had the strongest associations with greater expenses planned for toiletries, cigarettes, alcohol, and gambling (r≥0.25 for all associations). Greater planned expenses for phone and clothing were moderately associated with any psychiatric history and screening positive for current major depressive disorder, generalized anxiety disorder, and COVID-19 era–related stress (r≥0.20 for all associations). Expenses planned for drugs were also moderately associated with screening positive for major depressive disorder, generalized anxiety disorder, COVID-19 era–related stress, and any recent illicit drug use (r≥0.20 for all associations). In terms of participants’ ratings of the impact of the EIP on their lives, correlations showed that EIP impact ratings were negatively associated with planned expenses for cigarettes, alcohol, drugs, and gambling or lottery (r≥0.18 for all associations); expenses planned for paying debts were positively associated with EIP impact ratings.

For the strongest correlations we found (i.e., for those with r≥0.25), multiple regressions controlling for sociodemographic characteristics, number of medical conditions, and COVID-19 status confirmed the statistical significance of these associations (see Supplementary Table 1, available in an online supplement to this article). Additional correlational analyses (see Supplementary Table 2 in the online supplement) revealed that screening positive for current major depressive disorder, generalized anxiety disorder, COVID-19 era–related stress, and alcohol use disorder were each significantly associated with problems paying rent or mortgage (r=0.16–0.25), utilities (r=0.15–0.26), food (r=0.20–0.37), transportation (r=0.13–0.23), clothing (r=0.10–0.22), and medical care (r=0.07–0.18) in the past month. EIP receipt had small negative correlations with problems paying rent or mortgage, utilities, and food (r=−0.02 to −0.05).

Table 4 shows the results of logistic regression analyses on receipt of EIP, a positive screen for a mental health or alcohol problem, and their interaction in predicting problems paying expenses. There was only one significant interaction effect, which revealed that EIP receipt was significantly associated with fewer problems paying rent only for participants who did not screen positive for a mental health or alcohol problem.

The majority of our sample of middle- and low-income U.S. adults reported that they had received the EIP and that it had a positive impact on their life. About one-fifth of the sample who were eligible for the EIP reported that they did not receive it during the study period, which is estimated to be roughly equivalent to >13 million U.S. households not having received the payment (28). Adjusting for sociodemographic and clinical characteristics, we found that vulnerable groups, including women, veterans, those with no college degree, and those who tested positive for COVID-19, were more likely to have received the EIP. In addition, adults with a psychiatric history of schizophrenia spectrum disorder or PTSD were also more likely to have received the EIP. One contributing factor may be that some of these vulnerable groups may already have been enrolled in federal programs such as Medicaid, Social Security, and Department of Veterans Affairs benefits, which made it easier for them to receive their EIP through direct deposit (10). This finding may have implications for future disbursement of cash transfers such as the EIP, although it is important to recognize that many vulnerable groups are also unbanked or underbanked (29) and may be disproportionately affected if payments are only available through direct deposit.

Adults who reported more COVID-19 era–related stress or any recent suicidal ideation were less likely to have reported receiving their EIP than those who did not report these mental health problems. The COVID-19 pandemic has had deleterious effects on mental health and well-being (30–32), and it is well known that psychological distress can have a negative impact on daily functioning (33–36). One possible explanation, then, is that some adults who were eligible for the EIP were too preoccupied with mental health problems to attend to means for receiving or accessing their EIP. Alternatively, it may be that those who did not receive the EIP struggled more financially as a result, which contributed to their greater mental health problems. We could not infer directionality or causality from our data, but our findings are consistent with those from a body of literature that has documented disparities among low-income adults with mental illness (1–4), which may be driven by both internal and external factors. Moreover, systematic reviews have found that mental illness can cause poverty, and poverty can also cause mental illness, which may work through theorized mechanisms such as limited cognitive bandwidth (14, 15). This was further supported by our finding that those who screened positive for mental health or alcohol use problems were more likely to report problems paying for daily basic expenses.

On average, participants planned to use 63.4% of EIP funds for savings and paying debt and rent. Most remaining funds were planned to be used for daily needs, such as groceries and transportation, suggesting that many middle- and low-income adults were planning to use their EIP to sustain their current living situation. These findings are consistent with those of two other studies that found that the EIP led to smaller increases in durable spending and larger increases in daily expenses and paying debts (11, 12). Together, these findings highlight the economic struggles of middle- and low-income adults during the COVID-19 pandemic and the potential benefits an EIP may provide.

Notably, greater mental health problems were associated with greater expenses planned on alcohol, drugs, and gambling, although this finding was not surprising, given that mental illness is often comorbid with addictive disorders (37). Moreover, participants who planned expenses in these categories were less likely to report that the EIP was helpful for their lives; those who planned to pay debts were more likely to report that the EIP was helpful. These findings, although exploratory, suggest that the impact of cash transfers such as the EIP may depend on how well equipped the recipient is to manage the funds. Money management interventions have been developed to help adults who have low income and mental illness or addictive disorders manage their funds (38–40). It may be important to offer such interventions or include them as a component of a cash transfer program such as the EIP, especially for those with comorbid mental illness and substance use disorders. This area may be worthwhile to study in future programs, and future planning may also want to consider how participants receive cash transfers, because there is some evidence that this can affect spending patterns (41). For example, our exploratory analysis found that receiving the EIP as a direct deposit was correlated with greater planned expenses for paying debts versus other expenses such as alcohol, drugs, and gambling.

We note several limitations. The study was cross-sectional, and data were based on self-reports regarding the EIP. We assessed only planned expenses and not actual expenses, which may be particularly important in interpreting correlations between planned expenses on substance use and gambling, which relied on participants’ impulse control, so our findings need to be validated in a further study. We treated participants as individuals, but additional EIP funds were provided for larger households. These limitations were counterbalanced by the strengths of the study, including a nationally representative sample, inclusion of important sociodemographic and clinical variables, and results that contribute to timely information during the COVID-19 pandemic and the literature on unconditional cost transfers. Further research is needed to follow up EIP recipients over time to better understand long-term impacts, unintended consequences, and ways to build on the strengths of vulnerable populations.

For middle- and low-income adults, unconditional cash transfers, such as the EIP, are often used to sustain basic needs and may also present opportunities for financial education and money management interventions for adults with mental illness and substance use disorders.