The heterogeneous effects of COVID-19 on Canadian household consumption, debt and savings / by James MacGee, Thomas Pugh and Kurt See.: FB3-5/2020-51E-PDF
"This paper develops an agent-based modelling approach to quantify the impact of COVID-19-induced economic disruptions on household debt and unplanned savings over 2020. We merge data from the Survey of Financial Security and the Survey of Household Spending to construct a representative cross-section of households who vary in their income, debt portfolios and mix of consumption expenditures. We simulate a series of individual and aggregate shocks to household income and consumption expenditures that incorporate government policies such as Canadian Emergency Response Benefit (CERB) as well as shifts in consumption expenditures across hard-to-distance goods (e.g., travel, restaurants) and easy-to-distance goods (e.g., groceries). Differential impact on household incomes resulting from unemployment and reduced hours play an important role in driving household debt and savings. We highlight two other important channels. First, income replacement programs (notably CERB) only partially replace lost income for unemployed, previously middle-income households—which drives a rise in borrowing, particularly for those with mortgages. Second, upper-income households have relatively larger expenditures on hard-to-distance goods and so experience larger declines in consumption expenditures. This contributes to the high savings observed during March and April"--Abstract, page ii.
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publications.gc.ca/pub?id=9.894146&sl=0
Department/Agency | Bank of Canada, issuing body. |
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Title | The heterogeneous effects of COVID-19 on Canadian household consumption, debt and savings / by James MacGee, Thomas Pugh and Kurt See. |
Series title | Staff working paper = Document de travail du personnel, 1701-9397 ; 2020-51 |
Publication type | Series - View Master Record |
Language | [English] |
Format | Electronic |
Electronic document | |
Note(s) | "Last updated: November 27, 2020." Includes bibliographical references (pages 32-33). |
Publishing information | Ottawa, Ontario, Canada : Bank of Canada = Banque du Canada, 2020. ©2020 |
Author / Contributor | MacGee, James, author. |
Description | 1 online resource (ii, 37 pages) : colour illustrations. |
Catalogue number |
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Subject terms | COVID-19 (Disease) -- Canada -- Econometric models. COVID-19 Pandemic, 2020- -- Canada -- Econometric models. Households -- Canada -- Econometric models. COVID-19 -- Canada -- Modèles économétriques. Pandémie de COVID-19, 2020- -- Canada -- Modèles économétriques. Ménages (Statistique) -- Canada -- Modèles économétriques. |
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